A ten-year-old television costs $1,000 to replace and has an actual cash value of $300. With a personal property replacement cost endorsement, the claim settles at:
Explanation
Contents settle at actual cash value on an unendorsed homeowners form, and the personal property replacement cost endorsement removes the depreciation deduction, so the set is replaced at the $1,000 it costs today. The $300 answer is what the policy pays without the endorsement. Splitting the difference describes no settlement provision, and this endorsement does not create a special deductible.
This topic, taught in full in the California Property & Casualty Broker-Agent guide. California Property & Casualty Broker-Agent Study Guide — 2026 Edition — PDF + EPUB, $24.99 · 14-day refund →
Practice all 531 questions free — no signup required.
Own the complete California Property & Casualty Broker-Agent guide — PDF + EPUB, $24.99 →
Related questions on this topic
- An insured's adult son, who lives at home, runs up $900 on his mother's credit card without asking. The credit card coverage:
- A dwelling would cost $400,000 to replace and carries Coverage A of $280,000. A covered loss costs $60,000 to repair and its actual cash value is $45,000. The settlement is:
- A dwelling insured at $320,000 met the 80% test when written, but replacement cost has since risen to $450,000. At the next loss the form:
- A policy carries a $1,000 Section I deductible. A visitor's $800 of medical bills is presented under Coverage F. The insurer pays:
- An insured negligently starts a fire that burns down his own detached garage. Section II of the homeowners policy:
- A $100,000 Coverage E limit is paid out in full to settle one suit while a second claim from the same occurrence is pending. The insurer's duty to defend:
Last reviewed: · editorial process