AVP and ACV quotes hold distinct differences
San Francisco, CA -- (SBWIRE) -- 03/01/2013 -- Generally speaking, auto insurance can come in one of two varieties. First is Actual Cash Value (ACV), and the second is Agreed Value (AVP). The difference is highly important to classic car owners, and yet many owners fail to take note of the policies that guide both. That is inevitably where problems arise.
With ACV policy, the value of the vehicle will be determined at the time of a loss. What is more, the value is determined by the insurance company. One can always argue with them over the value, and some due succeed to some degree with that strategy. Still, there is little that one can do if there is a disagreement in value in the end.
The AVP, is the value of the car determined at the time of a policy being taken out. Unless one is taking placing an absurdly large value on the classic car, the insurance company is more often going to agree with amount. Appraisals are not unheard of, but overall the total is often agreeable. If there is a loss, the owner receives a check. When this happens, there are no arguments or negotiations required. Most important, the policies are only a fraction of the cost of an ACV.
Even some who know the difference between the two do not know that the Agreed Value policy is designed specifically for classic cars. What is more, neither do the insurance agents who often are dealing with the ACV policies on classic cars.
Companies that provide insurance coverage for the classic models offer Agreed Value policies at the fraction of the ACV costs for one reason in particular. They have crunched the numbers and recognize that it reduces their exposure to loss. The less loss, the less claims that they must pay. The less claims paid, the great saving that is passed along to the car owner.
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