Dwelling PolicyQuestion 80 of 158
Under a standard DP-3 without additional endorsements, how is a covered loss to the named insured's Coverage C personal property settled?
a.Replacement cost without depreciation
b.Guaranteed replacement cost up to 125% of the limit
c.Functional replacement cost
d.Actual cash value (replacement cost minus depreciation)
Explanation
Under every Dwelling Property form, personal property is settled at actual cash value (ACV) by default. To upgrade Coverage C to replacement cost the insured must add the Personal Property Replacement Cost Endorsement. Guaranteed replacement cost and functional replacement cost are not the standard settlement methods for DP Coverage C.
Law Reference: ISO Dwelling forms — Coverage C personal property settlementPractice all 158 questions free — no signup required.
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