Under the Florida Valued Policy Law, when a dwelling is totally destroyed and the policy limit is $200,000, the insurer must pay?

Under the Florida Valued Policy Law, when a dwelling is totally destroyed and the policy limit is $200,000, the insurer must pay?

• A. $200,000
• B. $185,000
• C. $0
• D. $200,000 minus deductible

Answer: (A)

Florida Valued Policy Law requires the insurer to pay the face amount of the policy when a dwelling is totally destroyed by a covered peril, up to the policy limit, regardless of depreciation or actual reconstruction cost. This means the payout is not reduced by wear and tear or by the dwelling’s current value. In this scenario, the policy limit is $200,000 and the dwelling is completely destroyed, so the insurer must pay $200,000. The law aims to ensure the insured receives the full coverage amount promptly.

Florida Valued Policy Law requires the insurer to pay the face amount of the policy when a dwelling is totally destroyed by a covered peril, up to the policy limit, regardless of depreciation or actual reconstruction cost. This means the payout is not reduced by wear and tear or by the dwelling’s current value. In this scenario, the policy limit is $200,000 and the dwelling is completely destroyed, so the insurer must pay $200,000. The law aims to ensure the insured receives the full coverage amount promptly.