Florida Insurance Claims Adjuster License Practice Exam

How are other properties, besides money and securities, valued in the event of a loss?

1. At their current market value

2. At actual replacement cost or, if less, cost to repair

3. At a depreciated value

4. At the purchase price

The correct answer is: At actual replacement cost or, if less, cost to repair

Other properties, besides money and securities, can be valued in a couple of different ways. Option A, at their current market value, may not accurately reflect the value of the property at the time of loss. Market value can change over time and may not consider factors such as wear and tear or unique characteristics of the property. Option C, at a depreciated value, also may not accurately reflect the value of the property at the time of loss as it considers only the decrease in value over time and not the actual cost of repair. Option D, at the purchase price, may also not be an accurate value as the purchase price may not necessarily reflect the current value of the property. Choosing option B, at actual replacement cost or, if less, cost to repair, takes into account the cost of repairing or replacing the property at the time of loss, providing a more accurate valuation in the event of