Question

ALL of the following are examples of open policies EXCEPT

1. market value.
2. agreed value.
3. actual cash value.
4. replacement value.

Answer 1

An open policy refers to an insurance policy in which the value of the insured item is not fixed or predetermined. Instead, the value is determined at the time of the loss or damage.

Step-by-step explanation:

An open policy refers to an insurance policy in which the value of the insured item is not fixed or predetermined. Instead, the value is determined at the time of the loss or damage. Open policies are commonly used for property insurance, such as homeowner's insurance or auto insurance.

Examples of open policies include:

• Market value: This refers to the current value of the item in the marketplace.
• Actual cash value: This is the replacement cost of an item minus any depreciation.
• Replacement value: This represents the cost of replacing the item with a similar one.

Agreed value, on the other hand, is not an example of an open policy. It involves a fixed or agreed-upon value that is determined in advance.