If the insured chooses this basis of property insurance payment in building and personal property coverage form, then the provision 7 valuation of section E, loss conditions, applies.Identify this basis of payment.
A)Replacement cost new
B)Virtual replacement cost
C)Actual cash value
D)Forecasted cash value
E)Extended replacement cost

Question

Quizplus · Accepted Answer

The Actual Cash Value basis of payment means that in the event of a loss, the insurance will pay the cost to repair or replace the damaged property minus depreciation. This is in contrast to replacement cost which does not deduct for depreciation. The provision 7 valuation of section E, loss conditions, typically applies to Actual Cash Value payments.

If the Insured Chooses This Basis of Property Insurance Payment