PLMAhard
On a MA HO-3 with replacement cost settlement on the dwelling, when the insured fails to repair or replace, the insurer is typically obligated initially to pay no more than which amount?
AFull replacement cost regardless of repair.
Actual cash value (ACV) of the damaged dwelling at the time of loss.
CA fixed percentage of replacement cost as an advance goodwill payment issued before any repair work begins.
DThe policy face amount of Coverage A in full.
Why this is the answer
On a MA HO-3 the insurer initially pays the actual cash value of the damaged dwelling. The replacement cost differential (holdback) becomes payable only when the insured actually repairs or replaces and submits evidence of completed work, subject to the ITV trigger and Coverage A limit.
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