Question

The standard basis of valuation under part D coverage for damage to your auto, is the lesser of the ______ ____ ____ of the vehicle, or the amount necessary to repair, or replace the vehicle.

Answer 1

The standard basis of valuation for part D auto coverage is the lesser of the vehicle's actual cash value or the cost to repair or replace it. If repair costs exceed the car's value, the insurance pays out the vehicle's worth instead. Otherwise, it covers repair costs if they are lower.

Step-by-step explanation:

The standard basis of valuation under part D coverage for damage to your auto is the lesser of the actual cash value of the vehicle, or the amount necessary to repair, or replace the vehicle. When evaluating damage costs from a traffic accident, insurance companies often use the vehicle's actual cash value as a threshold.

If the cost to repair the vehicle is higher than the actual cash value, the insurance company may deem the car a total loss and pay out the actual cash value instead.

For instance, if a car's actual cash value is $1,500 and the repair costs are $2,000, the insurance company would typically pay the $1,500 rather than the higher repair cost. Conversely, if the same car had repair costs of $1,000, the insurance company would pay the repair costs, as they are lower than the actual cash value.