Fire damages a dwelling insured on a basic form. Rebuilding the damaged portion costs $60,000, depreciation on it is $18,000, and the deductible is $1,000. The insurer pays:

Giải thích

The basic form settles building losses at actual cash value, which is replacement cost minus depreciation: $60,000 less $18,000 is $42,000. The deductible then comes off that settlement, leaving a check for $41,000. Taking the deductible off replacement cost and ignoring depreciation would produce $59,000, which is not how the basic form settles a loss.