PLNJhard
On a NJ 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 with no obligation to repair or replace the damaged property
Actual cash value (ACV) of the damaged dwelling at the time of loss.
C75% of replacement cost as a partial goodwill payment.
DThe full policy face amount of Coverage A, paid in one lump sum.
Why this is the answer
On a NJ 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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