Ace the Florida Insurance Claims Adjuster Test 2026 – Jumpstart Your Adjusting Adventure!

Question: 1 / 400

What does Replacement cost settlement imply in insurance?

Settlement based on the current market value

Providing reimbursement for repair costs only

Replacing old items with new without depreciation

Replacement cost settlement in insurance refers to the insurance company providing reimbursement for the cost of replacing damaged or lost items with new items, without taking into account any depreciation. This means that the individual will receive a payout that is enough to replace the damaged or lost item with a brand new one, rather than only receiving a portion of the current market value or the cash value of the item. Options A, B, and D are incorrect because they do not fully encompass the concept of replacement cost settlement and may result in the policyholder not being able to fully replace their damaged or lost items.

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Settling for the cash value of the item

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