If an insured has actual cash value coverage, how much would he collect given the following...
If an insured has actual cash value coverage, how much would he
collect given the following facts?
1) Replacement cost of the building is $200,000,
2) Replacement cost of the loss is $30,000,
3) Estimated total useful life is 30 years, and
4) Building has been in use 15 years.
-
A. $45,000
-
B. $15,000
-
C. $70,000
-
D. $30,000
Homework Answers
In an "Actual Cash Value" coverage insurance, a claim amount equal to the actual loss in cash basis is provided. Therefore, in the given scenario, the claim amount will be equal to replacement cost of the loss, which is $30,000. Therefore, Option D is correct.
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