If an insured wants to receive "new for old" in the event of a property loss, he or she would purchase

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If an insured wants to receive "new for old" in the event of a property loss, he or she would purchase

A. Actual cash value (ACV).
B. Replacement cost.
C. Agreed value.
D. Market value.

Answer: C. He or she would purchase replacement cost.

Insurance

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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