The definition of actual cash value is:

A) the cost of replacing damaged or destroyed property at the time of a loss.

B) replacing damaged property with similar property that performs the same function as the damaged or destroyed property.

C) replacement cost minus depreciation.

D) replacement cost plus depreciation.

Answer: C

Property

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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?

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