What should be the basis for settling Nathan’s insurance claim?

The correct basis for settling Nathan’s insurance claim is the policy provisions that were advertised. Insurance policies contain specific terms, conditions, and coverage limits that dictate how claims will be handled. These provisions outline the insurer's responsibilities and the covered perils that apply to a given policy.

By adhering to the advertised policy provisions, the settlement process ensures that claims are addressed fairly and consistently according to what was promised in the contract. This means that the insurance company must evaluate the claim based on the agreed-upon terms and conditions, clearly setting parameters for what is covered and what compensation the policyholder is entitled to.

The other choices do not establish a firm, contractual basis for claims settlement. While a claimant’s personal belief about what is fair or the adjuster’s subjective assessment may play roles in discussions, they cannot replace the legal and contractual standards set forth in the policy documentation. Current market prices may provide context or assist in determining a value but should not override what the policy explicitly stipulates regarding coverage and loss calculations.