When property insurers offer coverage on this basis, they do not deduct depreciation in valuing the loss.This is the value of the lost or destroyed property if it were bought new or rebuilt on the day of the loss.Identify this basis for valuation for property coverage.
A)Fair market value
B)Actual cash value
C)Real cost value
D)Intrinsic value
E)Replacement cost new

Question

Quizplus · Accepted Answer

Replacement cost new is the basis for valuation where insurers provide coverage without deducting depreciation, meaning the value of the lost or destroyed property is based on its cost if it were bought new or rebuilt on the day of the loss.

When Property Insurers Offer Coverage on This Basis, They Do