A food truck owner puts serious money into the build-out: the truck or trailer, the kitchen, the generator, the wrap. After a total loss, they expect to get that back. On many commercial auto policies, though, physical damage pays actual cash value, and even a "stated amount" may pay the lesser of the stated amount or actual cash value.
Only true agreed value coverage settles at a value fixed in advance. Not every carrier offers it, and it usually needs documentation.
Three valuation terms that sound alike
- Actual cash value: what the vehicle was worth at the time of loss, after depreciation.
- Stated amount: a value listed on the policy. Many forms pay the lesser of that amount or actual cash value, so it works as a cap.
- Agreed value: the carrier and insured agree on the value up front, and a total loss pays that amount, less the deductible.