Personal Auto PolicyQuestion 408 of 474
The insured's car is stolen and never recovered. Its actual cash value at the time of the theft is $14,000 and the other-than-collision deductible is $250. The insurer pays:
a.$13,500, because the $500 collision deductible applies
b.$13,750, the actual cash value less the deductible
c.$14,000, because theft losses are paid in full
d.The original purchase price of the car, less $250
Explanation
Theft is an other-than-collision cause of loss, so that deductible comes off the auto's actual cash value: $14,000 - $250 = $13,750. Collision does not respond to a theft, so subtracting a collision deductible for $13,500 applies the wrong coverage. Actual cash value, not the price the insured once paid, measures a physical damage loss.
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