QuestionI have a 1980 Dump truck with only 30,000 miles. I'm concerned that if I have an accident, I will not get much because of the age. I thought about a "stated amount" of $25,000 but my agent showed me the stated amount form & it said it will pay the "least" of the following (3). Actual cash value, repair or replace or stated amount. Is there anyway I can cover the vehicle so I get the $25,000? Tx, Dave
Answer
Dear Dave,
Maybe one of our insurance agent friends has a way to help you, but I do not know of any way to insure something for more than your "insurable interest" in the property.
But what I can do is to pass along what I believe to be the reasoning behind that rule.
The problem is that one's "insurable interest" is the maximum anyone can insure for. The loss will be paid no more than that, and by law cannot be paid more than that.
Otherwise we would be leaving an encouragement for people to destroy their property and make money doing it. Does that make sense to you? If not, let me give you an example.
My truck is "worth" (i.e. actual cash value) only $5,000, but I want to insure it for $25,000. Now I go and torch it--or claim a deer ran me off the road--anything to "total" it, and I want the insurance company to pay me $25,000 so I can "make" $20,000 on the loss of my asset.
You may value your truck more than the market place values it, but it is the market place that will define the extent of your "insurable interest" in any asset.
Best Wishes,
Dr. Settlement, J.D. (Juris Doctor)
http://www.SettlementCentral.Com
