Which statement best describes the Valuation method for money, securities, and other property?

• A. Money at face value; securities at value on the day loss is discovered; other property at actual replacement cost or, if less, cost to repair
• B. Money at market value; securities at face value; other property at replacement cost
• C. Money at replacement cost; securities at market value; other property at cost to repair
• D. Money at face value; securities at replacement cost; other property at market value

Answer: (A)

The concept being tested is how different asset types are valued for claim payments to align with how each asset actually behaves and with policy terms. For money, the payout is based on its face value—the nominal amount—because cash has a fixed value and there’s no depreciation or market fluctuation to consider. For securities, the payout uses the value on the day the loss is discovered to avoid letting market movements after discovery distort the settlement. This stabilizes the claim by using a time-bound, objective value. For other property, the goal is to restore the insured to pre-loss condition, so the valuation is based on actual replacement cost; however, if replacing would be more expensive than repairing, the payment is limited to the cost to repair. This combination—money at face value, securities at discovery value, and other property at replacement cost with the repair-cost exception—best fits the standard practice described.