Victor purchased $1 million of insurance on his home even though the house was only worth $500,000.Victor's house was destroyed by lightning.Under the insurance policy,Victor will be able to recover $1 million.

Question

Quizplus · Accepted Answer

Insurance policies typically pay out based on the actual cash value or the replacement cost of the property at the time of loss, not the amount of insurance purchased, to prevent profiting from a claim.

Victor Purchased $1 Million of Insurance on His Home Even