What benefit allowed a person to buy a new Apple computer after hers was destroyed in a fire?

What benefit allowed a person to buy a new Apple computer after hers was destroyed in a fire?

• A. Replacement cost
• B. Replacement value
• C. Actual cash value
• D. Appraised value

Answer: (B)

The concept of replacement value refers to the amount it would cost to replace an item with a new one of similar kind and quality, without factoring in depreciation. In the context of a person buying a new Apple computer after theirs was destroyed in a fire, replacement value allows the individual to receive enough financial support or compensation to purchase a new model, reflecting current market prices. This is especially relevant in insurance policies, where replacement value coverage ensures that the insured can replace their lost or damaged property with a comparable new item, providing financial security in the event of a loss like a fire. It emphasizes the importance of having insurance that covers the full cost of replacing belongings rather than just their depreciated value, thereby making the insured whole after a loss.

The concept of replacement value refers to the amount it would cost to replace an item with a new one of similar kind and quality, without factoring in depreciation. In the context of a person buying a new Apple computer after theirs was destroyed in a fire, replacement value allows the individual to receive enough financial support or compensation to purchase a new model, reflecting current market prices.

This is especially relevant in insurance policies, where replacement value coverage ensures that the insured can replace their lost or damaged property with a comparable new item, providing financial security in the event of a loss like a fire. It emphasizes the importance of having insurance that covers the full cost of replacing belongings rather than just their depreciated value, thereby making the insured whole after a loss.