Has anyone paid for stated amount coverage, made a claim, but was only paid "actual cash value"?
Total Comments: 7
Posted: Tue Nov 02, 2010 06:11 pm Post Subject:
I'm sure a few million people have. ACV is replacement cost less depreciation. It has nothing to do with the limits of the policy.
Posted: Tue Nov 02, 2010 06:56 pm Post Subject:
"Stated Amount" coverage is completely different from "Agreed Value" coverage.
Stated amount coverage shows the maximum amount payable in the event of a covered loss and does not guarantee that the amount of coverage purchased will necessarily be the amount paid, or indemnified. The insurer's liability is the cost to repair, replace or cash out their insured, at their discretion, not to exceed the stated amount (or maximum) of coverage.
In an Agreed Value policy, the amount of insurance on a particular item has been "agreed upon" in advance of any loss. The amount of agreed value must be supported by documentation; an appraisal or similar. In the event of a loss here, the amount of the coverage has been fixed at a particular amount and this is the amount that will be paid regardless of the actual value of the item insured at the time of the loss.
This is commonly an agent error in not knowing the specific differences between stated and agreed value forms.
InsTeacher 8)
Posted: Wed Nov 03, 2010 02:58 pm Post Subject:
I was actually looking to hear about personal experiences of this case
Posted: Wed Nov 03, 2010 03:04 pm Post Subject:
I was actually looking to hear about specific cases. Anyone pay for additional coverage on your car to cover custom parts? Did you have their vehicle stolen or totaled only to find out they were paying for the extra coverage for nothing?
Posted: Wed Nov 03, 2010 03:21 pm Post Subject: actually
im looking for any specific cases???
Posted: Wed Nov 03, 2010 05:57 pm Post Subject:
OP, I think you might be confused on a Stated Value policy and an Agreed Value policy. A Stated Value policy simply means _you_ state what dollar amount of coverage you want. This does not obligate the carrier to pay that amount. An Agreed Value policy means that both you and the carrier agree to the value of the item... so if it's a total loss, they pay that amount.
You posted this in the Auto Forum so I'm guessing it's an auto related question. I usually see Stated Value coverage on auto policies for items such as audio equipment. Agreed Value coverage is usually obtained on unique vehicle's where its difficult to obtain value.
Posted: Wed Nov 03, 2010 11:37 pm Post Subject:
To look at the OPs concern, which is custom parts and the idea that in the event of loss the insurer did not pay for those custom parts... is that right? Again, it depends on the language within the policy.
An important consideration that hasn't come up is the idea that losses to vehicles are NOT settled on a replacement cost basis! Auto losses are settled on an Actual Cash Value (ACV) basis, which is fancy insurance lingo for "depreciated value" of the item.
So, again, let's say you insured as a stated value your custom wheels on your car insurance and let's say you insured them for $1,000 each as that stated value. Then the wheels are stolen.
This does not mean that you are going to get $4,000. $4k is the MOST you would receive, but the value on those wheels is going to depreciate over time. They might have been worth $4k the moment you put them on your car, but they sure aren't worth $4k 2 years later. They're worth much less than that, probably around $250 each or so, give or take.
If you're thinking just because you have stated value coverage this means that you are going to receive the stated amount in the event of a loss, you're mistaken. That's not how it works.
Posted: Tue Nov 02, 2010 06:11 pm Post Subject:
I'm sure a few million people have. ACV is replacement cost less depreciation. It has nothing to do with the limits of the policy.
Posted: Tue Nov 02, 2010 06:56 pm Post Subject:
"Stated Amount" coverage is completely different from "Agreed Value" coverage.
Stated amount coverage shows the maximum amount payable in the event of a covered loss and does not guarantee that the amount of coverage purchased will necessarily be the amount paid, or indemnified. The insurer's liability is the cost to repair, replace or cash out their insured, at their discretion, not to exceed the stated amount (or maximum) of coverage.
In an Agreed Value policy, the amount of insurance on a particular item has been "agreed upon" in advance of any loss. The amount of agreed value must be supported by documentation; an appraisal or similar. In the event of a loss here, the amount of the coverage has been fixed at a particular amount and this is the amount that will be paid regardless of the actual value of the item insured at the time of the loss.
This is commonly an agent error in not knowing the specific differences between stated and agreed value forms.
InsTeacher 8)
Posted: Wed Nov 03, 2010 02:58 pm Post Subject:
I was actually looking to hear about personal experiences of this case
Posted: Wed Nov 03, 2010 03:04 pm Post Subject:
I was actually looking to hear about specific cases. Anyone pay for additional coverage on your car to cover custom parts? Did you have their vehicle stolen or totaled only to find out they were paying for the extra coverage for nothing?
Posted: Wed Nov 03, 2010 03:21 pm Post Subject: actually
im looking for any specific cases???
Posted: Wed Nov 03, 2010 05:57 pm Post Subject:
OP, I think you might be confused on a Stated Value policy and an Agreed Value policy. A Stated Value policy simply means _you_ state what dollar amount of coverage you want. This does not obligate the carrier to pay that amount. An Agreed Value policy means that both you and the carrier agree to the value of the item... so if it's a total loss, they pay that amount.
You posted this in the Auto Forum so I'm guessing it's an auto related question. I usually see Stated Value coverage on auto policies for items such as audio equipment. Agreed Value coverage is usually obtained on unique vehicle's where its difficult to obtain value.
Posted: Wed Nov 03, 2010 11:37 pm Post Subject:
To look at the OPs concern, which is custom parts and the idea that in the event of loss the insurer did not pay for those custom parts... is that right? Again, it depends on the language within the policy.
An important consideration that hasn't come up is the idea that losses to vehicles are NOT settled on a replacement cost basis! Auto losses are settled on an Actual Cash Value (ACV) basis, which is fancy insurance lingo for "depreciated value" of the item.
So, again, let's say you insured as a stated value your custom wheels on your car insurance and let's say you insured them for $1,000 each as that stated value. Then the wheels are stolen.
This does not mean that you are going to get $4,000. $4k is the MOST you would receive, but the value on those wheels is going to depreciate over time. They might have been worth $4k the moment you put them on your car, but they sure aren't worth $4k 2 years later. They're worth much less than that, probably around $250 each or so, give or take.
If you're thinking just because you have stated value coverage this means that you are going to receive the stated amount in the event of a loss, you're mistaken. That's not how it works.
InsTeacher 8)
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