Gary purchased a Personal Auto Policy (PAP)that included collision coverage.Gary lost control of his vehicle on an icy road.He slid off the road and hit a tree.Ignoring any deductible,what is the insurer's liability for damage to Gary's car?

Question

Quizplus · Accepted Answer

With collision coverage, the insurer's liability for damage to Gary's car would be the lesser of the actual cash value (market value) of the car or the amount necessary to repair or replace the vehicle. In this scenario, since Gary slid off the road and hit a tree, the car is likely damaged but not totally destroyed. Therefore, the insurer would determine the cost to repair the damage and pay up to the actual cash value of the car, which may be less than the cost of repairing it.

Gary Purchased a Personal Auto Policy (PAP)that Included Collision Coverage