An earthquake does $5,000 in damage to a property covered under a dwelling policy. How much will the insurer pay after a gas main explosion also causes $2,500 in additional damage?

In this scenario, the correct determination is based on the specifics of what a typical dwelling policy covers. Most standard dwelling policies exclude coverage for earthquakes. This means that even though the earthquake caused $5,000 in damage to the property, the insurer is not obligated to pay for that incident because it falls under an exclusion in the terms of the policy.

Additionally, even though the explosion caused further damage amounting to $2,500, that damage would typically only be covered if the underlying cause (the earthquake) was also covered. However, in this case, since the earthquake damage isn't covered, the total claim—consisting of both the earthquake damage and the explosion damage—is not payable. Thus, the insurer will not issue any payment for either of those damages, resulting in no compensation being provided.

This aligns with standard property insurance principles, where coverage hinges on the specifics of the policy and its exclusions. Therefore, the correct conclusion is that the insurer pays nothing for the combined damages from both events.