Homeowners Policy (HO)Question 325 of 474
A six-year-old sofa would cost $2,400 to replace and has depreciated by half. On an unendorsed Homeowners form the contents claim settles at:
a.$2,400, the replacement cost
b.$1,200, the actual cash value
c.$1,800, three quarters of the new cost
d.$2,400 with no deductible due
Explanation
Personal property settles at actual cash value on the unendorsed form, which is replacement cost minus depreciation, so $2,400 less half its value leaves $1,200. Paying the full $2,400 is what a personal property replacement cost endorsement would buy, and the deductible still comes off whichever settlement basis applies.
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