Anna's home is located in a historic district. Because various building components in her home are no longer used in modern structures, its replacement cost value is high, and so is her homeowners insurance
premium if she insures to value. Her insurance agent suggests she consider
an endorsement that would provide coverage on a functional replacement
cost basis. Why should Anna reject this suggestion?
a. Contractors who specialize in restoration will not honor this
endorsement.
b. Functional replacement cost insurance covers fewer causes of loss.
c. Replacing original building components with functionally equivalent
items might not be permitted.
d. This endorsement would not reduce her premium.