Gary purchased a Personal Auto Policy (PAP) that included collision coverage. Gary lost control of his vehicle on an icy road. He slid across the center line into oncoming traffic. Another vehicle hit his car, causing severe damage to it. Ignoring any deductible, what is the insurer's liability for damage to Gary's car?

Question

Quizplus · Accepted Answer

The insurer's liability for damage to Gary's car is the lesser of the actual cash value or the amount necessary to repair or replace the vehicle, as stated in the collision coverage of a Personal Auto Policy. This means that if the actual cash value of the car is less than the cost of repairing or replacing it, the insurer will only pay up to the actual cash value. If the cost of repairing or replacing the car is less than the actual cash value, the insurer will pay for the cost of repairing or replacing the car.

Gary Purchased a Personal Auto Policy (PAP) That Included Collision