Settlement of a covered building loss differs between a partial loss and a total loss because:
Explanation
A partial loss is measured by what it costs to repair or replace the damaged portion, valued as the policy's valuation clause requires, while under the policy's own valuation terms a total loss is settled at the lesser of the property's value and the limit, which is why an underinsured owner feels the limit at a total loss. Coinsurance is tested on partial losses as usual, and the deductible comes off either kind of loss. Purchase price does not govern, because it carries land and market factors the policy does not insure.
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