Jim and Janet’s house is an older home with lath and plaster walls. Following a kitchen fire, the insurance company pays to have the wall replaced with drywall that is just as functional, but costs less than lath and plaster. Which loss valuation allows the insurance company to have plaster replaced with drywall?

Insurance

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Jim and Janet’s house is an older home with lath and plaster walls. Following a kitchen fire, the insurance company pays to have the wall replaced with drywall that is just as functional, but costs less than lath and plaster. Which loss valuation allows the insurance company to have plaster replaced with drywall?

1. Actual cash value

2. Functional replacement cost

3. Replacement cost

4. Market value

Answer: 2. Functional replacement cost

The above question Jim and Janet’s house is an older home with lath and plaster walls. Following a kitchen fire, the insurance company pays to have the wall replaced with drywall that is just as functional, but costs less than lath and plaster. Which loss valuation allows the insurance company to have plaster replaced with drywall?, Was part of Insurance MCQs & Answers. I hope you got the correct answer to your question. Have a great time ahead.