M.F.A. Mutual Insurance Company v. Gulf

Mike and Lela Maksin (hereafter referred to as "owners") entered into a contract with Earl M. Parker (hereafter referred to
as "contractor") for the construction of a house on land owned by them for a total price of $28,000, with additional payments
for extras ordered by owners. Payments by owners to the contractor were to be made in the amounts and at the times provided
for in the contract as the construction work progressed. After owners had paid $17,125 (which included $265 for extras), and
after the contractor had expended $21,781.77, 1 the partially constructed building was totally destroyed by fire on January
4, 1967. On November 4, 1966, Gulf Insurance Company (hereinafter referred to as "Gulf") issued to owners its "builders' risk" policy
on the building insuring them against the risk of fire in the "provisional amount" of $30,000, but providing that on "any
day" the policy was in force the "actual amount of insurance" was "that proportion of the provisional amount that the actual
value of the described property on that date bears to the value on the date of completion," but not in excess of the provisional
amount. This policy also contained the provision that Gulf "shall not be liable for a greater proportion of any loss than
the amount hereby insured shall bear to the whole insurance covering the property against the peril involved, whether collectible
or not."