Georgia Property & Casualty Practice Exam

If a bulldozer valued at $25,000 sustains $10,000 in repairs after a fire, what is the insurance value post-payment?

1. $10,000

2. $15,000

3. $25,000

4. No remaining coverage

The correct answer is: $25,000

In the scenario presented, the bulldozer originally valued at $25,000 undergoes $10,000 in repairs after a fire. The insurance value post-repair is determined by considering the actual value of the bulldozer before the loss and any potential depreciation. After the fire, even though repairs have been made, the bulldozer is still worth its original value of $25,000. The repair costs address the damage but do not reduce the intrinsic value of the bulldozer back to pre-loss levels. In many property insurance contexts, the property retains its total value unless the insuring agreement specifies otherwise, such as indemnification conditions or depreciation. Therefore, the insurance value post-payment reflects the full value of the bulldozer, which remains at $25,000. This understanding is crucial for evaluating property values, claims, and recoveries in property insurance.