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Her home has a replacement value of $150,000, therefore she insures her home for the minimum legal requirement of

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6 votes

Answer:

$120,000

Step-by-step explanation:

There is actually no minimum legal home insurance requirement. But if you have a mortgage on your house, the lender will require home insurance that covers at least the loan amount.

Regarding insurance companies, the 80% rule applies. This means that she must purchase an insurance policy that covers at least 80% of her house's replacement value = $150,000 x 80% = $120,000. If her policy covers less, then in case she files a claim, the insurance company will pay only a proportionate amount of the repairs or replacement value.

User Manoj Sehrawat
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