CMFAS PGI Property & Household Insurance question: CONTENTS

CMFAS PGIProperty & Household Insurance

For CONTENTS, the sum insured should reflect which of the following?

A The rebuilding cost of the structure, since contents are insured as part of the flat
B The market value of the home including land, as shown in the latest valuation
C The outstanding mortgage on the property, as the lender's interest must be protected
D The value of all belongings, as new or depreciated depending on the policy basis

Show the answer and explanation

Answer: D. The value of all belongings, as new or depreciated depending on the policy basis

The contents sum insured should reflect the value of all belongings — their replacement-as-new cost on a reinstatement basis, or their depreciated value on an indemnity basis, depending on the policy.

Common mistake

Applying the structure's rebuilding-cost or market-value basis to contents.

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CMFAS PGI Property & Household Insurance question: CONTENTS

Answer: D. The value of all belongings, as new or depreciated depending on the policy basis

Common mistake

Related CMFAS PGI questions

CMFAS PGI Property & Household Insurance question: CONTENTS

Answer: D. The value of all belongings, as new or depreciated depending on the policy basis

Common mistake

Related CMFAS PGI questions