How much will an actual cash value policy indemnify Clara for her stolen harp?

The correct answer regarding the indemnification amount for Clara's stolen harp is tied to the nature of actual cash value (ACV) policies, which base their payouts on the item's current market value less any depreciation.

In this case, the ACV provides coverage by taking into account what the item is worth today, rather than its original purchase price. Although the harp may have been purchased for a certain amount, its value may have decreased due to various factors such as wear and tear, market demand, or changes in condition. Therefore, for an actual cash value policy, the assessment of worth serves to bring the payout in line with economic realities at the time of the loss.

This means that the payout would be determined by calculating the current market value of the harp and then subtracting any depreciation. This ensures that the insured party receives a fair value that reflects both what the item was originally worth and its actual worth at the time of the loss.