CISR Insuring Commerical Property Questions With Correct Answers!!

Select the answer that most closely describes Actual Cash Value (ACV). - A method of establishing the value of property wherein depreciation and obsolescence are deducted from the value of the property. Select the answer that most closely describes Functional Replacement Cost. - A provision which changes the policy valuation so as to provide for replacement with a different structure which performs the same service or function, but is less costly. Which of the following statements best defines direct loss? - Losses incurred when there is tangible visible damage to the insured's property. Which one of the following does not have an insurable interest in a property? - Neighboring businesses Select the answer that most closely describes Replacement Cost. - Insurance issued in an amount to cover the property described for a limit that will be adequate to replace the structure at the cost of today's labor and materials. Which one of these statements best describes Coinsurance? - A contractual promise to carry an amount of insurance equal to, or greater than, a fixed percent of the current value of the property. Failure to comply results in a penalty. Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $300,000 Policy Limit $240,000 80% Coinsurance Clause Loss amount $280,000 What amount of insurance is required to comply with the coinsurance provision? - $240,000 Using the values listed below, answer the coinsurance problem. Ignore deductiblesBuilding Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 How much will the policy pay? - $37,500 Using the values listed below, answer the coinsurance problem. Ignore deductibles Building Value (at time of loss) $500,000 Policy Limit $300,000 80% Coinsurance Clause Loss amount $50,000 What amount of insurance is required to comply with the coinsurance provision? - $400,000 What amount of insurance is required to comply with the coinsurance provision, and how much will the policy pay? Building Value (at time of loss) $100,000 Policy Limit $80,000 80% Coinsurance Clause Loss amount $15,000 - $80,000; $15,000