Barnaby Is Applying for Insurance for His New Home

question 79

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 be covered with his home at 125% of his home's insured amount.
• E) His coverage should be increased as construction costs rise.

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Definitions:

Hippocampus

A neural center located in the limbic system; helps process explicit (conscious) memories—of facts and events—for storage.

Frontal Lobes

The portion of the cerebral cortex lying just behind the forehead; involved in speaking and muscle movements and in making plans and judgments.

Explicit Memory

A form of enduring memory that entails the deliberate recall of particular details and occurrences.

Semantic Memory

Explicit memory of facts and general knowledge; one of our two conscious memory systems (the other is episodic memory).