Question 1 of 17
Explain when functional replacement cost is preferable to ordinary replacement cost for an older or unusual building.
Strong Interview Answer
Functional replacement cost is useful when exact reproduction of obsolete, antique, or custom construction would be impractical or disproportionately expensive. It allows damaged property to be repaired or replaced with modern materials or methods that perform the same function, subject to the policy.
What to Listen For
- functional equivalence
- modern materials or methods
- obsolete/custom construction
- policy terms
Caution
Reward explanation and application. Do not accept a one-word product/rule name without the controlling reason.