Because of Moral Hazard Issues, an Insurer May Prefer to Value

question 20

Multiple Choice

Because of moral hazard issues, an insurer may prefer to value personal property at _____ value, which considers depreciation of the property before valuation.

• A)fair market
• B)actual cash
• C)real cost
• D)intrinsic
• E)replacement cost new

---

Definitions:

Paving Streets

The process of covering and constructing roads with materials like asphalt or concrete to create a smooth, durable surface for vehicles and pedestrians.

Property Value

The monetary worth that is assigned to a property, based on factors such as market conditions, location, and the state of the property.

Creditor Beneficiary

A third party that benefits from a contract made between two other parties, wherein the promisee's intention is to provide a benefit to the creditor beneficiary.

Intended Beneficiary

An individual or entity that is not a direct party to a contract but stands to benefit from its performance.