Which of the following statements best describes the 80 percent rule?
A)Your home is covered for 80 percent of its original value,regardless of replacement cost.
B)Your home is covered for replacement cost,provided the total premiums paid are less than 80 percent of the outstanding premiums due.
C)Replacement cost coverage is only effective if your home is insured for at least 80 percent of its replacement cost.
D)Your house cannot be replaced if its replacement cost is less than 80 percent of assessed market value.
E)none of the above

Question

Quizplus · Accepted Answer

The 80 percent rule refers to the requirement that your home must be insured for at least 80 percent of its replacement cost in order for replacement cost coverage to be effective. This means that if the cost to rebuild your home exceeds its insured value by more than 20 percent, you may not receive enough compensation to cover the full cost of rebuilding. So it is important to make sure you have sufficient coverage to meet this requirement. Options A, B, and D do not accurately describe the 80 percent rule.

Which of the Following Statements Best Describes the 80 Percent