Dwelling Policy (DP)Question 273 of 474
A dwelling insured on a basic form is damaged by fire. The building loss is settled on:
a.A functional replacement cost basis for old homes
b.An actual cash value basis at the time of loss
c.A replacement cost basis with no deduction taken
d.A market value basis set by a local appraisal
Explanation
The basic dwelling form settles building losses at actual cash value, that is, replacement cost less depreciation at the time of the loss. Replacement cost on the dwelling is what the broad and special forms offer when their insurance-to-value condition is met, and market value is a sale price that reflects land and location rather than rebuilding cost.
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Related questions on this topic
- Coverage E on a dwelling policy responds when:
- An owner lives in half of a duplex and rents out the other half. A covered fire makes both halves unlivable. The correct treatment is:
- When a dwelling policy settles a fair rental value claim, the insurer pays:
- A basic form dwelling loses a roof section that costs $12,000 to replace and has depreciated $4,000. Before any deductible, the policy pays:
- The broad and special dwelling forms differ from the basic form in that they settle:
- A dwelling costs $300,000 to replace and is insured on a special form for $180,000 under an 80% loss-settlement condition. A partial building loss is settled:
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