When Insuring Property,people Need to Consider Not Only Replacing and Restoring

question 25

Multiple Choice

When insuring property,people need to consider not only replacing and restoring the actual property in the event of a loss,but also __________. ​

• A)the liability arising from the insured's responsibility for property loss
• B)the construction cost of the property
• C)the home equity in the property
• D)the excess compensation claim for loss to the property

---

Definitions:

Flexible Budget

A flexible budget adjusts expenses based on changes in actual revenue or other activities, allowing for more accurate budgeting and variance analysis.

Variable Costs

Expenses that vary in direct proportion to changes in activity levels or volumes, such as raw materials and direct labor costs.

Fixed Costs

Costs that remain constant in total regardless of changes in the activity level within a relevant range.

Fixed Costs

Costs that do not vary with the level of output or sales in the short term, such as lease payments, insurance, and salaries of permanent staff.