The Replacement Cost of a Home Covered Under the HO-3

question 33

Multiple Choice

The replacement cost of a home covered under the HO-3 policy is $100,000. Assume the home is insured for $50,000 and a $10,000 loss occurs (replacement cost) . Also assume depreciation is set at 10 percent. Assume that there is no deductible. How much will the insured recover if repaired?

• A) $9,000
• B) $10,000
• C) $8,000
• D) $6,250

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