Dwelling PolicyQuestion 118 of 215
By default, on what valuation basis are losses to the dwelling settled under the DP-1 Basic Form?
a.Actual cash value (ACV)
b.Replacement cost without depreciation
c.Agreed value
d.Functional replacement cost
Explanation
The DP-1 Basic Form settles losses on an actual cash value (ACV) basis, meaning replacement cost minus depreciation. Replacement cost coverage on the dwelling is generally only available under DP-2 and DP-3 (subject to the 80% coinsurance condition). Agreed value and functional replacement cost are not the default settlement methods on DP-1.
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