Actual Cash Value (ACV) vs. Stated Amount

Insurance policies can be a difficult to read and understand; especially if the client isn’t familiar with industry terms and aren’t fully educated on your policy prior to purchase. At Network Truck Insurance Services, our agents work tirelessly to ensure our clients understand their trucker insurance policy and their coverage. However, one area we commonly clarify is the basis in which the physical damage policy is written: Actual Cash Value or Stated Amount.

Actual Cash Value and Stated Amount are terms that refer to the method used to value a particular piece of equipment. Each system is very different, and important to understand in the event of a claim.

Actual Cash Value: This is a method of valuing equipment that many insurance companies offer to their fleet clients (clients operating 10 or more power units). At policy inception clients are required to provide a current equipment schedule that includes the general estimated value of their equipment. However, this is not the value relied upon in the event of a claim. Instead, in the event of physical damage to a truck or trailer, the adjuster will go into the marketplace and determine the value of the equipment on the date of loss. Should there be a total loss; the amount the equipment is worth on the day of the accident minus the applicable deductible will be paid. The benefit of this type of valuation on a physical damage policy is that there is no limit to the value of the equipment. It is simply worth what it is worth, no more and no less.

Stated Amount: This method of equipment valuation puts the responsibility of the reported value on the owner. The general premium of this policy is adjusted according to value of the truck or trailer. In the case of an accident, the adjuster will go into the marketplace and determine the value of the equipment on the date of loss. This is where stated amount comes into play. If the vehicle was stated to be valued at $10,000 by the owner, and upon an accident the adjuster finds the vehicle to be worth $20,000, only the stated $10,000 may be paid out. Likewise, if the equipment is overvalued, only the current value on the date of loss may be paid. It is important to maintain current values on all equipment with this type of policy, both to avoid over paying premium or incurring a financial loss should the vehicle or trailer be under insured.

Wondering if your physical damage policy is Actual Cash Value or Stated Value? Give us a call at 800-266-8789 and our expert agents or dedicated customer service team will answer your questions.