Chapter3: Tax Formula And Tax Determination : An Overview Of Property Transactions
Section: Chapter Questions
Problem 5DQ: In choosing between taking the standard deduction and itemizing deductions from AGI, what effect, if...
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Question
An insured is purchasing a Building and Personal Property Coverage Form (BPP) to cover her business. She asks the agent to explain how her property will be valued in the event of a loss. Which one of the following statements made by her agent accurately describes how the covered property will be valued in the event of loss?
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The insurer is obligated to pay replacement cost regardless of whether or not the property has actually been repaired or replaced.
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The insurer is obligated to pay the cost to replace the damaged or destroyed property with new property of like kind and quality without any deduction for
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Insurers underwrite the coverage carefully because some items that can be difficult to value, such as manuscripts, works of art, antiques, and rare articles, are covered for replacement cost.
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If the insured elects to accept an ACV claim settlement, the insured is barred from later requesting payment of replacement cost.
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