Actual Cash Value

It means the actual price of the item during the event of a casualty such as fire, flood, accident, damage, collision, etc. In this case, the claimant submits a claim to the right adjuster in order to counterbalance the incurred loss caused by the specified casualty.

The claim that will be used to indemnify or reimburse the claimant over the damage or whatsoever of his property will mostly be determined by the exact market value of the item involved. This is to ensure the complete and correct or adequate compensation to the claimant.

The process also includes a proper review of the car, including the glass, tiers, the body, and some other equipment and appliances. The compensation of the car may be in the form of cash or a replacement of the car by another of the same value.

The principles and laws involved in the process may vary from place to place. The method of compensation to the payee may depend on the insurer (insurance company) of the policyholder (the person having the auto insurance) and /or the condition as at the time of the incurred loss of the property involved.

A claimant, after being compensated, may decide to continue on the premium of his item to the insurer or stop or switch to a completely different insurer.

Posted in: Glossary of Auto Insurance (A)