David Has a Homeowners 3 Policy That Provides $280,000 of Insurance

question 38

Multiple Choice

David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling,which has a current replacement value of $400,000.Ignoring any deductible,how much will David collect if a kitchen with a replacement value of $24,000 but an actual cash value of $18,000 is destroyed in a fire?

• A)$18,000
• B)$20,000
• C)$21,000
• D)$24,000

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Definitions:

Skill-Based Pay

Skill-based pay is a compensation system where employees are paid based on the range, depth, and types of skills and knowledge they possess, rather than their job title or position.

Flexibility

The quality of being adaptable or variable, especially the ability to respond to changes in circumstances or environments.

Productivity

The measure of efficiency in converting inputs into useful outputs, commonly used in analyzing the performance of businesses, economies, or individual workers.

Supervisory Costs

Expenses associated with overseeing and managing employees, including salaries of supervisors and costs related to training and supervising staff.