CFA CFA Insurance Appraisal & Estate Valuation

Question 1

What type of value does an insurance appraisal for a collectible firearm typically establish?

Accepted Answer

Replacement value

Answer

Insurance appraisals establish replacement value, which represents the cost to replace the firearm with one of like kind and quality.

Question 2

When appraising a firearm for insurance purposes, which value standard typically results in the HIGHEST dollar amount?

Accepted Answer

Replacement value

Answer

Replacement value is typically the highest standard as it reflects the retail cost to replace the item with a comparable one.

Question 3

A 'scheduled personal property' endorsement on a homeowner's policy typically requires what from a firearms appraiser?

Accepted Answer

A written appraisal with itemized values

Answer

Scheduled endorsements require a written appraisal with specific itemized values to establish individual coverage limits for each firearm.

Question 4

How often should insurance appraisals for valuable collectible firearms generally be updated?

Accepted Answer

Every 3–5 years

Answer

Insurance appraisals for collectible firearms should be updated every 3–5 years to reflect current market conditions and prevent underinsurance.

Question 5

What is 'agreed value' coverage in the context of firearm insurance?

Accepted Answer

A pre-set payout amount agreed upon before a loss occurs

Answer

Agreed value coverage establishes a fixed payout amount negotiated by the insurer and insured before any loss, eliminating depreciation disputes at claim time.

CFA Practice Test

CFA Practice Test

CFA CFA Insurance Appraisal & Estate Valuation