Even Though Homeowners Are Eligible for Reimbursement on a Full

question 32

Multiple Choice

Even though homeowners are eligible for reimbursement on a full replacement-cost basis if they keep their homes insured for at least 80% of the amount that it would cost to build them today, _____ can cause the actual amount of coverage to fall below 80%.

• A) the replacement cost
• B) inflation
• C) the insurance premium
• D) deductibles
• E) the land value

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Definitions:

Contracts

Legal agreements between two or more parties that are enforceable by law.

Performance-based Contracts

Agreements where the compensation or continuation is contingent upon meeting predefined performance criteria or outcomes.

Nonprofit

An organization dedicated to furthering a particular social cause or advocating for a shared point of view, without the aim of generating profit for its owners or organizers.

Power

The ability or capacity to direct or influence the behavior of others or the course of events.