Because of moral hazard issues, an insurer may prefer to value personal property at _____ value, which considers depreciation of the property before valuation.
A)fair market
B)actual cash
C)real cost
D)intrinsic
E)replacement cost new

Question

Quizplus · Accepted Answer

Actual cash value takes into account depreciation, which means it reflects the current value of an item considering its age and wear, aligning with the insurer's preference to mitigate moral hazard by not overvaluing the property.

Because of Moral Hazard Issues, an Insurer May Prefer to Value