Florida Insurance Claims Adjuster License Practice Exam

If an insured's house is totally destroyed by fire and has an insurance value of $200,000, but the ACV is determined to be $185,000, how much does the Florida Valued Policy Law require the insurer to pay?

1. $185,000

2. $200,000

3. The amount the homeowner can prove

4. Nothing, if arson is suspected

The correct answer is: $200,000

Option A is incorrect because it only accounts for the actual cash value (ACV) of the insured's property, which is determined to be $185,000. The Florida Valued Policy Law requires the insurer to pay the full insurance value of $200,000, regardless of the ACV. Option C is also incorrect because it only references what the homeowner can prove, which may not necessarily be the same as the insurance value. The Florida Valued Policy Law removes the need for the insured to prove the value of their property in the event of a total loss, as the insurance value is stated in the policy. Option D is incorrect because arson is not mentioned in the question. The Florida Valued Policy Law applies in cases of total loss due to a variety of perils, not just fire. If arson is suspected, the insurer may investigate and deny coverage, but it does not automatically mean