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.

Question

Quizplus · Accepted Answer

Actual cash value is calculated as replacement cost minus depreciation. Depreciation is determined by the age of the building divided by its useful life. Here, depreciation is 15/30 or 50%. Therefore, the depreciated value of the loss is $30,000 - (50% of $30,000) = $15,000.

If an Insured Has Actual Cash Value Coverage,how Much Would