If the original purchase price was 180,000, what is the minimum insurance?

• A. 180,000
• B. 200,000
• C. 0
• D. 100,000

Answer: (A)

When determining minimum insurance, the idea is to have enough coverage to rebuild or replace the home. If the problem uses the original purchase price as the baseline for minimum coverage, you would need at least 180,000 insured to match that cost. Choosing 0 would leave you without protection, and 100,000 is still under the needed amount to cover rebuilding costs. A higher figure like 200,000 is acceptable but not the minimum; the smallest sufficient amount here is 180,000.