If the insured chooses this basis of property insurance payment in building and personal property coverage form, this optional coverage must be designated in the declarations and the insured must actually repair or replace the covered property.Identify this basis of payment.
A)Forecasted cash value
B)Replacement cost new
C)Extended replacement cost
D)Actual cash value
E)Virtual replacement cost

Question

Quizplus · Accepted Answer

Replacement cost new is the correct option because it means the insurance company will pay the cost of replacing damaged property with new property of similar kind and quality, without deducting for depreciation, provided the insured actually repairs or replaces the property.

If the Insured Chooses This Basis of Property Insurance Payment