Is Vehicle Damage Insurance the Same as the Vehicle's Appraised Value?
1 Answers
Vehicle Damage Insurance coverage is not necessarily equivalent to the vehicle's price. There are three methods to determine the coverage amount for Vehicle Damage Insurance: First, it can be based on the new car purchase price, which means full coverage, essentially matching the coverage amount with the new car's value. Second, it can be determined according to the vehicle's actual value at the time of insurance purchase, calculated by subtracting depreciation from the new car purchase price, resulting in underinsurance. Third, the coverage amount can be negotiated between the policyholder and the insurance company, typically applied to rare or confiscated vehicle models, where the coverage amount does not reflect the vehicle's price. Detailed introduction to Vehicle Damage Insurance: 1. Definition: Vehicle Damage Insurance is a type of commercial auto insurance where the insurer compensates within reasonable limits for damages to the insured vehicle caused by an insured accident while being driven by the policyholder or an authorized driver. 2. Coverage Scope: In the event of an insured accident, the insurer will cover necessary and reasonable rescue expenses paid by the policyholder to prevent or reduce the loss of the insured vehicle, up to the maximum coverage amount.
