Several different values can be considered when determining how much insurance should be carried on a dwelling (the Coverage A limit of the Homeowners 3 policy).The appropriate value that should be used is:
A)the home's market value.
B)the home's actual cash value.
C)the home's appraised value for property tax purposes.
D)the home's replacement cost.

Question

Quizplus · Accepted Answer

The best choice is the home's replacement cost, as it represents the cost of rebuilding the home with materials of similar kind and quality in case of a total loss. Market value, actual cash value, and appraised value for property tax purposes do not necessarily reflect the cost of rebuilding the home, as they may be influenced by other factors such as location, market conditions, depreciation, and tax assessments.

Several Different Values Can Be Considered When Determining How Much