Barnaby Is Applying for Insurance for His New Home

question 92

Multiple Choice

Barnaby is applying for insurance for his new home.Which of the following is correct?

• A) He should base the amount of insurance on the price he paid for it.
• B) He should insure the building for 75% of its replacement cost.
• C) He should use the actual cash value method for settling claims to receive the full cost of repairing or replacing his personal belongings.
• D) His personal belongings should automatically be covered with his home at 125% of his home's insured amount.
• E) His policy should automatically increase coverage as construction costs rise.