Washington State Insurance Practice Exam

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Study for the Washington State Insurance Exam. Prepare with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What does a valued policy provide in the event of a total loss?

Payment of the actual depreciated value
Payment of the full policy amount
Reimbursement for damage repairs
Limited financial compensation

The correct answer is: Payment of the full policy amount

A valued policy provides for the full policy amount to be paid in the event of a total loss, ensuring that the policyholder is fully covered and receives the maximum amount of compensation. Option A is incorrect because it only offers the depreciated value, which may be significantly less than the full amount. Option C may only cover damage repairs and not a total loss. Option D states "limited" financial compensation, which may not be sufficient to cover the total loss. Therefore, B is the best option as it provides the most comprehensive coverage in case of a total loss.