A homeowner's insurance policy that includes a provision for ________ would provide the homeowner with enough cash to replace the items lost with new items.
A) actual book value protection
B) cash in lieu of coverage
C) guaranteed replacement cost
D) full collateral damage protection

Question

Quizplus · Accepted Answer

Guaranteed replacement cost coverage is an insurance provision that guarantees to pay the full cost of replacing or repairing the items lost or damaged, regardless of their actual cash value. This means that the homeowner will receive enough cash to replace the items with new ones, without any deductions for depreciation. Option A, actual book value protection, would only provide coverage for the depreciated value of the lost items. Options B and D are not commonly used insurance provisions.

A Homeowner's Insurance Policy That Includes a Provision for ________