In the context of homeowners insurance, the final settlement amount for a claim is typically determined by the coverage limits specified in the policy, as well as the actual amount of damage incurred. In this case, Bill’s homeowners policy has a limit of $225,000.
When a property is destroyed, the insurance company will generally pay up to the limit of the policy for the covered loss, provided that the claim is valid and all terms of the policy are met. Since Bill's home was destroyed and his policy caps coverage at $225,000, the settlement will match that cap, assuming the damage is evaluated to be equal to or less than the policy limit.
The options that exceed $225,000 cannot represent the final settlement amount, as they surpass the maximum payout defined by the policy. Thus, the logical conclusion is that the final amount Bill would receive for the total destruction of his home corresponds exactly to the limit of his coverage, which is $225,000.