What is essentially covered under a loss settlement provision?

The loss settlement provision is primarily designed to determine how claims will be settled under an insurance policy following a loss. This provision specifically addresses the methods and values involved in restoring or replacing damaged property.

The correct choice highlights that the loss settlement provision covers the cash equivalent required to restore property after damage has occurred. This means that when a covered loss takes place, the insurer will provide the dollar amount necessary to return the property to its previous condition, factoring in actual restoration costs rather than simply the initial purchase price or market value. This approach ensures policyholders can adequately repair or replace their damaged assets without facing financial shortfall.

In contrast, other options may misunderstand the context of loss settlement. For instance, while the value of property before damage is important for determining the initial coverage amount, it does not reflect how claims are settled after a loss. The cost to replace property without deductions might imply a new-for-old scenario which isn't always provided depending on policy terms. Similarly, estimating the selling price of damaged property does not apply to settlement provisions focused on repair costs—this is a separate consideration not typically involved in how insurers calculate claim payouts.