Georgia Adjuster Practice Test

If a total loss occurs to a one or two family dwelling after the policy has been in effect for 30 or more days, what must the insurance company do according to Georgia's valued policy law?

1. Pay partial damage coverage

2. Pay the full amount of insurance on the dwelling

3. Repair the dwelling

4. Provide temporary housing

The correct answer is: Pay the full amount of insurance on the dwelling

In Georgia, the valued policy law mandates that if a total loss occurs to a one or two-family dwelling after the insurance policy has been in effect for at least 30 days, the insurance company is required to pay the full amount of insurance on the dwelling. This law serves to protect policyholders by ensuring they receive the full value of their coverage in the event of a total loss. The rationale behind this requirement is to provide assurance to property owners that their investment is sufficiently insured. The law reinforces the commitment of the insurer to honor the terms of the policy, effectively eliminating the potential for disputes regarding the payout amount in the case of total loss. This provision does not pertain to partial damage coverage, repairs by the insurance company, or the provision of temporary housing, as it specifically addresses circumstances of total loss and the obligation of the insurer to pay the agreed-upon amount for the dwelling itself.