A painting that has been in Chandlers family for years is damaged by an insured peril.The insurer offers Chandler the cost to replace the painting with a new one of similar quality,which is $5,000. Chandler prefers to keep the painting so he can attempt to repair it himself. Which of the following is a true statement about this scenario?
A)The insurer will not let him keep the painting, and he must take the $5,000 settlement.
B)Chandler may keep the painting, but will most likely have to accept an amount for the loss that equals $5,000 less the salvage value of the painting
C)Chandler may keep the painting, but will forfeit any cash settlement he may have otherwise been entitled to receive from his insurer.
D)Chandler may keep the painting, plus receive the $5,000 settlement from his insurer.

Question

Quizplus · Accepted Answer

When an insured item is damaged or destroyed, the insurer typically has the right to take possession of it and pay the insured the documented value of the item. However, in this case, Chandler wants to keep the painting and attempt to repair it himself. Therefore, the insurer will most likely offer him a settlement amount that takes into consideration the salvage value of the damaged painting. This means that Chandler may keep the painting but will likely receive a lower settlement amount than if he had agreed to let the insurer take possession of it.

A Painting That Has Been in Chandlers Family for Years