[Insurance as a Contract – Indemnity]Kamal’s home has an actual cash value (ACV) of $380,000...

Indemnity means restoring the insured to the financial position they occupied immediately before the loss—no better, no worse. Since the loss amount is$180,000, this is the amount required to fully indemnify the insured.

Although the policy limit is$400,000, the insurer does not pay policy limits unless the loss equals or exceeds the limit. The ACV of $380,000 is irrelevant here because the loss ispartial, not total. ACV only caps reimbursement in cases of total loss or when replacement cost is not available.

Option B ($200,000) has no basis in any indemnity or co-insurance formula.

Options C and D refer to total loss payouts, not applicable here.

Thus, the amount that indemnifies Kamal isA: $180,000.