West Virginia Adjusters Practice Exam 2025 - Free Adjuster License Practice Questions and Study Guide

The true statement regarding Nancy's indemnification if her home is destroyed by fire centers on her insurance policy coverage. Indemnification in this context means that the insurance company will compensate Nancy for her loss according to the terms set in her insurance policy.

If her policy states a specific limit of coverage, Nancy is entitled to receive up to that limit, regardless of the amount it costs to rebuild. This principle is designed to ensure her financial protection and to restore her to a position as close as possible to her financial state before the loss occurred. Therefore, even if she rebuilds for less than the insured amount, the insurance may still cover the full limit of her policy.

This aspect of insurance is rooted in the principle of indemnity, which aims to prevent an insured person from profiting from their loss. It's essential for policyholders to understand how their coverage works to ensure adequate protection for their property.