Loss Valuation and Construction

Roger’s house was built in 1948. If Roger’s house burns to the ground, his homeowners insurance policy will pay to hire a general contractor to rebuild him a new house of similar size and quality. What type of loss valuation method is this?

Gloria’s house was built in 1928. The interior walls are made of lath and plaster. If Gloria’s house was damaged by a wind storm, her homeowners insurance policy will pay to repair the home with drywall–instead of lath and plaster. This loss valuation method is called what?

The process of determining the limit of insurance for a building or other property is known as

The formula to determine actual cash value (ACV) is

Louie is very proud of his 1957 Chevrolet Bel Air that he recently restored. He asks the WeInsureOldCars Insurance Company to insure it for $78,000, and the insurer accepts his request. WeInsureOldCars guarantees that it will pay $78,000 if the car is totaled by a covered cause of loss. This loss valuation method is

A valued policy is essentially the same as which other loss valuation method?

Which type of construction has the least favorable fire rating and is charged the highest premium for fire insurance?

Which type of construction has the most favorable fire rating and is charged the lowest premium for fire insurance?

Of the following, which is NOT a method used to determine the limit of insurance for insurance policies?

In 2002, Daniel bought a new home entertainment system for $15,000. Due to the age and condition of the system, it has depreciated $4,000 in value since 2002. The cost of a new similar system is $16,000. If Daniel’s homeowners insurance policy covers the system using actual cash value (ACV), how much will the policy pay if the system were completely destroyed by a fire?

Ali’s seven-year-old computer was damaged in a fire. Her insurance policy paid an amount significantly less than the amount needed to buy a similar new computer, due to the computer’s age and condition. The loss valuation method used was

The stated amount method is similar to agreed value and valued policy. However, with stated amount, the limit of insurance stated in the policy is ____________ the insurer will pay in the event of a total loss.