Hi Everyone,
Now that the first hectic 2 weeks of January are behind us, time to settle in and get back to business. A common question that we receive is that of "Stated Amount" or "Stated Value" on a
Commercial Auto Insurance policy. Does that mean that whatever amount someone chooses to place on their truck is what it will pay out at the time of loss?
No, in fact, it's the most misleading term in insurance that I can think of off the top of my head. The insurance carrier is obligated to pay "the lesser of", either the Stated Amount/Value you choose, or the
Actual Cash Value at the time of loss.
In other words, you can't place $75K on a $50K truck and expect to receive $75K if it's stolen. An insurance carrier is in the business of getting back where you were, not to make a profit off of a theft or accident.
This is a great time of the year to review your Commercial Auto Policy and see what you currently have listed for your Stated Amount/Value. For bigger trucks,
Truck Trader is where you'd get your compare your unit with others to get an idea of what you should be insuring it for. For smaller cargo vans and sprinters, blue book is still a good source.
Then update your policy. If the value you choose is lower, your premium will drop and you have a few extra bucks in your pocket.
For those of you who want to know more about insurance terms, "Agreed" Value is what is used on specialty cars, and these are the policies that pay out the amount chosen by the insured regardless of actual cash value.
Shelly Benisch, CIC
Commercial Insurance Solutions, Inc. (CIS)
330.864.1511
Comments - Tell us what you think below
Linda
20 Jan 2010, 13:00
20 Jan 2010, 13:00
Shelly we have saved a lot of money on our truck insurance over the years.
When the truck was new every 3 to 6 months I would call the dealer we
bought the truck from and ask what the market value was of the truck. As
the truck has aged I only do this once a year. When you call your dealer
you will need the truck model, basic specs, and mileage to get an accurate
figure.
