Donna owns a commercial building that has a small retail shop,three offices,and a small warehouse.Each unit is rented out to a different company.She has taken out a standard fire insurance policy for the appraised value of the building.On July 1st,the building and its contents are destroyed by fire.The cause of the fire was never determined.Which of the following is true?

Question

Quizplus · Accepted Answer

The policy will pay for the building and any furnishings owned by Donna up to the face value of the policy. It will not cover damages to the personal property of the tenants or lost profits. Additionally, the policy may not cover the full replacement cost of the building if the appraised value was less than the actual replacement cost. Damaged inventory in the warehouse may be covered if it was owned by Donna, but this is not guaranteed.

Donna Owns a Commercial Building That Has a Small Retail