After submitting a claim to the insurance company, the insured becomes concerned that he will not be paid the full amount he is expecting to replace his damaged business personal property. He decides to read his policy to learn the insurer's options for paying a covered loss. Which one of the following statements is correct with regard to the Loss Payment condition of the Building and Personal Property Coverage Form (BPP)? The insurer has 90 days after receiving a satisfactory proof of loss to notify the insured of its intent to either pay a claim or deny payment. The Loss Payment condition states that the insurer will pay the cost of repairing or replacing the damaged property, including any increased cost attributable to enforcement of ordinances or laws regulating the construction, use, or repair of the property. The condition states that regardless of the value of the loss, the insurer will pay no more than the insured's financial interest in the covered property. Insurers preferred settlement option is to repair, rebuild, or replace the damaged property with other property of like kind and quality because it keeps loss settlement costs down.

Introduction When insurer read the policy to learn the options for paying a covered loss then he…

Answered: After submitting a claim to the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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After submitting a claim to the insurance company, the insured becomes concerned that he will not be paid the full amount he is expecting to replace his damaged business personal property. He decides to read his policy to learn the insurer's options for paying a covered loss. Which one of the following statements is correct with regard to the Loss Payment condition of the Building and Personal Property Coverage Form (BPP)?

		The insurer has 90 days after receiving a satisfactory proof of loss to notify the insured of its intent to either pay a claim or deny payment.
		The Loss Payment condition states that the insurer will pay the cost of repairing or replacing the damaged property, including any increased cost attributable to enforcement of ordinances or laws regulating the construction, use, or repair of the property.
		The condition states that regardless of the value of the loss, the insurer will pay no more than the insured's financial interest in the covered property.
		Insurers preferred settlement option is to repair, rebuild, or replace the damaged property with other property of like kind and quality because it keeps loss settlement costs down.

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