Under a Multiple Insurance Clause, a Homeowner Who Insures a Home

question 60

True/False

Under a multiple insurance clause, a homeowner who insures a home for 80 percent of its value can recover only 80 percent of the cost for damage to it.

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Definitions:

Variable Costs

Charges that adjust based on the volume of sales or production levels.

Fixed Costs

Expenses that do not change as a function of the activity of a business, within the relevant period.

Break-Even Point

The level of sales at which total revenues equal total costs, resulting in no net loss or gain.

Sales Mix

The composition of a company’s product or service sales, showing the relative proportions of each product or service sold.