Minnesota Real Estate Exam Practice Question
A homeowner wishes to purchase coverage for a home built in 1850. The home was constructed with hand-carved crown molding and banisters. The market value of the home is significantly less than the actual cost to replace the home. Which policy would BEST suit this customer?
Correct Answer: D
Rationale: When considering the best coverage for a historic home built in 1850, option D is ideal as it typically offers replacement cost coverage, ensuring that the homeowner can fully restore or replace unique features like hand-carved crown molding and banisters without being limited by market value.
Options A, B, and C may provide coverage but often focus on actual cash value, which factors in depreciation and may not adequately cover the costs of restoring or replacing historic elements. Therefore, these options could leave the homeowner underinsured, particularly for a property with significant historical and architectural value.
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