Joe McCoy in SC emailed "How do I know my truck is covered for what it's worth in a loss… is that Physical Damage?"
Joe McCoy in SC emailed “How do I know my truck is covered for what it’s worth in a loss…is that Physical Damage?”
Joe is not alone in questioning how his truck is covered. The term “Physical Damage” refers to your truck’s value at the time of loss. You have a Comprehensive and Collision Deductible just like your car insurance.
The difference is that on your personal auto policy you probably have Replacement Cost, but in the Commercial world “Stated Amount” is used.
Your “Stated Amount” is the Market Value at the time of loss, so a good question to ask yourself in determining your vehicle value is, “What would I sell it for now?”
All trucks are not the same, especially in the Expediting Industry. At the time of loss the insurance company will use a number of sources to find fair market value. Your value is based on nationwide comparable vehicles using year, make, model, engine, mileage, options and overall condition. This is what you should be using to set your “Stated Amount” on your policy.
This doesn’t mean you can insure your $50,000 Straight Truck for $150,000 and expect the insurance company to pay out.
Similar to a casino, it “leans towards the bank”…The insurance company pays “the lesser of” the Stated Amount on the policy or the amount they can purchase the same vehicle for on the open market.
That being said, many of our Owner Operators are often shocked at the “low” vehicle value they currently have set by their base company insurance plan, or that their Permanently Attached Equipment like generators or Qualcoms aren’t covered.
Setting your Stated Amount is research you need to do yourself with the help of your Truck Insurance Specialist. This value should be reviewed together each and every year as your vehicle depreciates with time or appreciates with added equipment or features.
MyCISagent Expediter Insurance Tip of the month:
Choose a $100 Deductible for Comp versus $1,000, it costs very little to make the change and it covers you for Fire, Theft, Flood, Animal Hits, Windshields and more. And make sure you have the Equipment attached to your truck insured!
Questions? Contact Shelly Benisch, CIC
