<\/p>\n
Commercial auto insurance policies pay the lesser of 1) the actual cash value of the damaged or stolen vehicle, 2) the cost to repair the damage to the vehicle, or 3) the cost to replace the vehicle with a similar one.\u00a0 So whichever one of those three categories costs the least amount of dollars, that\u2019s what they\u2019ll pay you.<\/p>\n
But there are often some additional limitations that can sneak in on you.<\/p>\n
One such limitation is the Stated Value Limitation.<\/p>\n
What is a Stated Value Limitation?\u00a0 It is a cap on the amount that your policy will pay.<\/p>\n
For example, let\u2019s say you have a 2009 Ford F150 Regular Cab insured with a $5,000 Stated Value Limitation.\u00a0 That means that $5,000 is the maximum your policy will pay in any claim\u00a0regardless if it costs more to repair, replace, or pay for the actual cash value of the damage<\/strong>.<\/p>\n Is this a problem?\u00a0 It may or may not be \u2013 it just depends on if you\u2019ve accurately stated the value of your truck.\u00a0 Is $5,000 enough?\u00a0 If the real value of your truck is $7,500, then it\u2019s a problem, a $2,500 problem!<\/p>\n We all want to save money on our insurance.\u00a0 We don\u2019t want to over-insure our stuff.\u00a0 But we also don\u2019t want to under-insure our stuff.\u00a0 The temptation \u2013 in order to save money \u2013 is to low-ball the value of your stuff so your insurance costs less.\u00a0 I\u2019m here to tell you: don\u2019t do it!\u00a0 It\u2019s not worth it.\u00a0 You will not be happy if you insure your truck for $5,000, it gets totaled, and it turns out the minimum cost to replace your truck is $7,500.\u00a0 You will not enjoy getting underpaid for your truck, and you will be especially upset knowing that the cost to be properly insured would have been probably less than $100 per year.<\/p>\n Yep, the Stated Value Limitation can be an ugly beast.\u00a0 But the good news is there are two ways to make sure your don\u2019t get stuck with a Stated Value Limitation<\/p>\n One \u2013<\/strong>\u00a0use accurate values when insuring your vehicles.\u00a0 How do you do that?\u00a0 Check\u00a0Kelley Blue Book<\/a>\u00a0or\u00a0Edmunds<\/a>.\u00a0 Both give a good estimate of how much your vehicle is valued at.\u00a0 Make sure you base the value on the Private Party Value \u2013 NOT the Trade In Value.\u00a0 The Trade In value estimates how much you would get if you traded your vehicle in to the dealer as you\u2019re buying a new vehicle.\u00a0\u00a0 Trade In Values are far too low, and don\u2019t reflect the situation you\u2019re going to be in in an insurance claim.\u00a0 The Private Party Value is the most accurate value.<\/p>\n Two \u2013<\/strong>\u00a0remove the Stated Value Limitation on your insurance policy.\u00a0 The difference in pricing is minimal.\u00a0 Without the Stated Value Limitation, there is no cap on how much will be paid, other than the conditions mentioned in the first paragraph above.\u00a0 Ask your agent if you have a Stated Value Limitation on your policy and what it would cost to remove it.\u00a0 Sometimes you\u2019re stuck with it.\u00a0 If so: refer to rule one.<\/p>\n Commercial auto insurance has many more restrictions and limitations than most people think.\u00a0 You get what you pay for.\u00a0 It\u2019s only a bummer when you don\u2019t know what you\u2019re paying for.\u00a0 Be in the know and avoid insurance surprises!<\/p>\n","protected":false},"excerpt":{"rendered":" Have you ever wondered just how much you will […]<\/p>\n","protected":false},"author":3,"featured_media":3459,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,3],"tags":[],"class_list":["post-3469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-auto-insurance","category-business-insurance"],"_links":{"self":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/comments?post=3469"}],"version-history":[{"count":1,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3469\/revisions"}],"predecessor-version":[{"id":44635,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3469\/revisions\/44635"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media\/3459"}],"wp:attachment":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media?parent=3469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/categories?post=3469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/tags?post=3469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}