Texas Adjuster Practice Test

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Prepare for the Texas Adjuster Test with comprehensive quizzes, multiple choice questions, and in-depth explanations. Enhance your knowledge and succeed in your exam!

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Your policyholder has a COV A limit of $158,000 and needs to assess a detached garage loss. What is the maximum amount payable for a completely destroyed garage?

$15,800
$14,220
$12,500
$16,000

The correct answer is: $15,800

In this scenario, the maximum amount payable for the detached garage loss is determined by the Coverage A limit and the property's value. In many cases, a percentage of the principal limit is applied to cover structures that are not attached to the main dwelling, such as detached garages. Given a Coverage A limit of $158,000, it is common for insurers to limit the payout for detached structures at about 10% of that amount. Calculating 10% of $158,000 gives you $15,800. This figure represents the maximum coverage available for the detached garage. The other figures provided do not align with the typical policy limit for an unattached structure based on the guidelines often followed in insurance policies. Therefore, $15,800 is the correct and maximum amount payable for a completely destroyed garage under these circumstances.