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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?

1 Answer

3 votes

Answer:

E) $210,000

Step-by-step explanation:

In his case, Cheyenne has a policy that covers actual cash value which means that the insured policy is valued by a percentage of the insured amount. In this case, the policy covers 70% of the insured amount = $300,000 x 70% = $210,000.

The other method valuing insured property is the replacement cost which considers the value of replacing an existing construction.

User Shravan Kumar
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