Quentin is getting quotes for insurance on his building.His agent recommends he purchase enough to cover the ___________________ even though this amount is more than Quentin paid for it.

Question

Quizplus · Accepted Answer

Quentin should purchase enough insurance to cover the replacement value of his building, which is the cost to replace the building at current market rates. This may be more than what he paid for it, but it ensures that he is fully covered in case of a loss. Actual cash value (B) is the value of the property at the time of loss after depreciation, which may not provide enough coverage. Coinsurance value (C) is a penalty for underinsuring the property and minimum value (D) is not recommended as it may not provide sufficient coverage.

Quentin Is Getting Quotes for Insurance on His Building