Homeowners’ Policies
What kinds of risks are covered? - Two types
All risk coverage - covers all risks that are not specifically
excluded in the policy
Named perils coverage - covers only risks that are
specifically mentioned
How much will be reimbursed if loss occurs?
– Two types
Replacement cost -amount needed to replace new for
old, with no deduction for depreciation
Actual cash value - market value, equal to replacement
cost less depreciation