Escrow & Title
What is 'replacement cost' versus 'actual cash value' in property insurance?
AReplacement cost pays to rebuild at current costs; actual cash value pays replacement cost minus depreciation✓ Correct
BBoth types pay the same amount; the terms are interchangeable
CReplacement cost is for residential; actual cash value is for commercial
DActual cash value pays to rebuild at current costs; replacement cost pays for the original construction value
Explanation
Replacement cost coverage pays to rebuild or repair the property at current construction costs without deducting for depreciation. Actual cash value (ACV) coverage pays replacement cost minus depreciation, often resulting in a lower payout.
Related Delaware Escrow & Title Questions
- What is a 'Closing Protection Letter' (CPL) in a Delaware real estate transaction?
- What is a 'closing disclosure' (CD) in a Delaware residential transaction under TRID rules?
- Delaware is considered an 'attorney closing state,' which means:
- Under Delaware law, which lien has the highest priority against a property?
- Marketable title in Delaware means:
- In a Delaware closing, who typically selects the title insurance company?
- In a Delaware real estate closing, the HUD-1 or Closing Disclosure shows:
- What is the difference between 'actual notice' and 'constructive notice' in Delaware property law?
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →