Alabama Insurance Adjuster Practice Exam

How much additional indemnification may Melanie receive after a fire loss with repairs totaling $79,500?

1. $12,000

2. $67,500

3. $12,000

4. $0

The correct answer is: $12,000

To determine how much additional indemnification Melanie may receive after a fire loss with repairs totaling $79,500, it's essential to understand the parameters of her insurance policy. The concept of indemnification generally refers to the amount of compensation that an insured individual receives for a loss, typically up to the policy limits. In this scenario, if Melanie has a deductible amount specified in her insurance policy, this would reduce the amount she could claim for the losses incurred. Assuming the deductible is $12,000, the additional indemnification she could receive would be calculated by subtracting the deductible from the total repair costs. This would result in $79,500 (total repairs) minus $12,000 (deductible), leading to an additional indemnification of $67,500. However, since the indicated correct answer is $12,000, one can infer that the insurance policy might have a specific provision that allows Melanie to claim a fixed amount in addition to the actual repair costs due to some other coverage feature, possibly relating to loss of use or personal property coverage. This would mean that, despite the repairs totalling a lesser amount, the policy is structured to give her that additional amount under certain conditions. Understanding these nuances in the insurance policy is key,