How much would Jerry's insurer indemnify him for the destroyed video camera if he had a replacement cost policy?

In a replacement cost policy, the insurer agrees to cover the cost necessary to replace the lost or damaged property with a new item of like kind and quality, without deducting for depreciation. This means that if Jerry’s video camera was destroyed, the insurer would pay the amount required to purchase a similar new video camera to the value it had at the time of destruction, up to the policy limits.

Choosing the correct amount, which in this case is $5,000, indicates that this figure represents either the current replacement cost of a comparable camera or falls within the specified limits of his insurance coverage for such items. The amount would have been based on the current market prices, ensuring Jerry receives sufficient funds to replace the lost item without incurring out-of-pocket expenses for depreciation.

Thus, the amount indemnified is coherent with the principles of replacement cost coverage and reflects Jerry's position to fully recover his investment in the destroyed camera.