Taylor purchased a 20-year old house for $200,000. The house has an estimated useful life of 80 years. Taylor insured the house for $200,000. The replacement cost of a similar house with materials of like kind and quality is $240,000. The house is totally destroyed in a tornado.

1. Based on the actual cash value rule, how much will Taylor collect from her insurer? Explain.
2. If the loss occurs in a state with a value policy law, how much will Taylor collect from her insurer? Explain.