Cheyenne Has a Home Insured for $300,000

question 36

Multiple Choice

Cheyenne has a home insured for $300,000. It would cost $320,000 to rebuild her home. If she has home insurance that provides personal property coverage at 70% of value, how much of her household belongings would be covered?

• A) $120,000
• B) $210,000
• C) $224,000
• D) $300,000
• E) $320,000

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Definitions:

Reasonable Amount

An amount that is fair and moderate, not excessive or extreme.

Irrevocable Offer

A rule that no consideration is necessary when a merchant agrees in writing to hold an offer open for the sale of goods. Also called firm offer.

Reaffirmation

A legal agreement to continue paying a dischargeable debt after bankruptcy, often to retain collateral or maintain a relationship with the creditor.