Assume That the Law in Your City Provides That a Building

Multiple Choice

Assume that the law in your city provides that a building that does not comply with the building code is permitted to stand, but if it is damaged by fire or other peril to the extent of 50 percent of its value, it must be demolished.Now, your garage does not meet building code requirements and is damaged by fire to such an extent that it must be razed.Identify the situation that follows.

A) The insurer will cover either the fire damage or the loss caused by the demolition of the garage, but not both.
B) The insurer will cover both losses-the fire damage loss and the loss by demolition.
C) The insurer will not cover any loss-the fire damage loss or the loss by demolition.
D) The insurer will not cover the loss caused by the fire, but will cover the loss caused by demolition.
E) The insurer will cover the loss caused by the fire, but will not cover the loss caused by demolition.