Personal Auto PolicyQuestion 24 of 474
An insured's vehicle is damaged in a covered collision. The cost to repair plus the salvage value of the wreck exceeds the vehicle's actual cash value. Under the Personal Auto Policy, the loss is most appropriately handled as:
a.A betterment claim requiring the insured to pay 50% of the repair cost
b.An ineligible claim because the vehicle is mechanically unsalvageable
c.A total loss (constructive total loss), with the insurer paying ACV less the deductible and taking the salvage
d.A partial loss, with the insurer paying the full repair estimate and the insured keeping the wreck, because Part D sets no ACV ceiling on repairs
Explanation
When the cost to repair plus the salvage value of the damaged vehicle exceeds its actual cash value (ACV), the vehicle is treated as a constructive total loss under Part D. The insurer pays the ACV (less the applicable deductible) and takes ownership of the salvage. This avoids wasting money on uneconomic repairs.
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