Beaux just purchased homeowners insurance that has personal property coverage based on actual cash value. His...

Beaux just purchased homeowners insurance that has personal property coverage based on actual cash value. His policy is more expensive than if he had replacement cost coverage for his personal property.

T OR F

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Expert Solution

Answer: False

Explanation: Replacement cost coverage insurance is more expensive than actual cash value insurance because replacement cost coverage has higher premiums due to more benefits it gives than actual cash value insurance. Replacement cost coverage pays for the full replacement cost of items while the actual cash value insurance only pays for the depreciated value of items. Due to this, replacement cost coverage becomes expensive because insurance company needs to pay out more if the personal property gets damaged.

Thus, the answer is false for the given question.

ekkarill92 answered 1 year ago

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