Homeowners Policy (HO)Question 300 of 474
A home carries Coverage A of $280,000. A detached garage is destroyed and costs $34,000 to rebuild. On an unendorsed form, Coverage B pays at most:
a.$34,000
b.$56,000
c.$28,000
d.$14,000
Explanation
Coverage B is provided at 10% of Coverage A, and 10% of $280,000 is $28,000, so the owner absorbs the remaining $6,000 of rebuilding cost. The $34,000 answer assumes other structures are paid up to their full rebuilding cost; the limit is a stated percentage, and it is an additional amount of insurance rather than a slice carved out of Coverage A.
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