American_Bankers_Association
CTFA · Question #378
CTFA Question #378: Real Exam Question with Answer & Explanation
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Question
Assume that fire destroys two rooms of furniture that were 6 years old and had an estimated useful life of 10 years. The replacement cost is $5,000. Therefore at the time of loss, the furniture was subject to an assumed physical depreciation of 60%, i.e., 3,000 in this case. Because the actual cash value is estimated at $2,000. So, the maximum insurer would have to pay is:
Options
- A$2,200
- B$2,000
- C$3,000
- D$5,000
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