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The Replacement Cost of a Home Covered Under the HO-3

Question 1

Multiple Choice

The replacement cost of a home covered under the HO-3 policy is $100,000. Assume the home is insured for $50,000 and a $10,000 loss occurs (replacement cost) . Also assume depreciation is set at 10% and a $500 deductible applies. How much will the insured recover if the damage is repaired?


A) $9,000
B) $8,500
C) $5,937
D) $6,250

Correct Answer:

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