In a pro rata payment situation, how much will Steve's insurance cover after hailstorm damage to their home?

In a pro rata payment situation, the insurance company calculates the payout based on the proportion of coverage that is applicable in relation to the value insured. This process takes into account the coverage limits and the actual cash value of the property as well as any remaining balance on the mortgage or financing against the property.

If Steve's insurance covers $10,400 for hailstorm damage, this amount would represent the maximum coverage limit offered by his insurance policy based on the assessment of the damage against the insured value of the home. Therefore, in situations where the damage incurred meets the coverage limits, Steve would receive the full benefit as outlined in his policy.

The situation might also involve determining if there were any deductibles or if the property was underinsured, but the choice of $10,400 reflects the relevant consideration for total damages covered without any adjustments. Understanding how pro rata payments work helps to discern why the coverage limit is crucial when calculating payouts.