Collin insures his building for $250,000.At the time of loss,the property is valued at $220,000.Under:
A)an open policy, Collin would recover $220,000.
B)an open policy, Collin would recover $250,000.
C)a valued policy, Collin would recover $220,000.
D)Both (a) and (c).
E)Both (b) and (c).

Question

Quizplus · Accepted Answer

Under an open policy, the amount of recovery is limited to the actual value of the property at the time of loss, which is $220,000 in this case. The insured value of $250,000 is irrelevant in this situation. On the other hand, in a valued policy, the amount of recovery is based on the insured value, which is $250,000 in this case. Therefore, option C is incorrect. Option D is also incorrect because option A has already covered the scenario of an open policy. Option E is incorrect because option C is incorrect.

Collin Insures His Building for $250,000