RMI EXAM 2(2024 Latest Update)Correct 100%

chapter 5 - ANSWER chapter 5 principle of indemnity - ANSWER The insurer agrees to pay no more than the actual amount of the loss purpose of principle of indemnity - ANSWER -to prevent the insured from profiting from a loss -to reduce moral hazard in property insurance, indemnification is based on the _____ - ANSWER actual cash value methods of determining actual cash value - ANSWER -replacement cost less depreciation -fair market value -broad evidence rule actual cash value - ANSWER defined as replacement cost less depreciation fair market value - ANSWER the price a willing buyer would pay a willing seller in a free market broad evidence rule - ANSWER the determination of actual cash value should include all relevant factors an expert would use to determine the value of the property important EXCEPTIONS to the principle of indemnity - ANSWER -valued policy -valued policy laws -replacement cost insurance -life insurance valued policy - ANSWER a policy that pays the face amount of insurance if a total loss occurs. such as antiques that don't have