acv deductible definition
A deductible is the amount of money an individual pays for expenses before his insurance plan starts to pay. The word deductible can also work as an adjective to describe the tax-deductible expenses that can deducted from someone's adjusted gross income to reduce his taxable income and his tax liability. Next Up. 1 Coinsurance is a condition that may be found in more than one type of insurance policy. 2  The need for a coinsurance provision in all insurance policies is the same.  The use of a coinsurance provision in an insurance policy is universally understood. How it works. Comprehensive coverage typically pays for repairs after any of these events (after you pay your deductible) as long as the cost doesn't exceed your car's actual cash value. Actual cash value is defined as your car's original purchase price minus depreciation. Rate deviations are applied against the base (manual) rate to reflect size of deductible, construction, occupancy, and loss control standards. A coinsurance condition in a property insurance policy is analogous to the need for a standard definition of payroll to compute workers compensation premium. Coinsurance requirements differ by insurance policy type to reflect the insurer's and/or insured's specific need. In health insurance, it may be used as a means of risk sharing between insured and insurer as a means to lower the insured's monthly premium cost. For example, covered expenses above the deductible may be shared 80 percent insurer/20 percent insured until a policy-stated total is reached. MONDAY, JULY 21, 2014. If you've ever taken a close look at your auto insurance policy, you may have noticed the term actual cash value. It’s on the declarations page, usually next to Collision or Other Than Collision, if you opted to add these coverages to your policy. Actual cash value is a term you've probably taken for granted because you've seen it so many times. But the phrase may never seem relevant to you until you have a car accident and the damage appraiser lists the repairs as calculated based on ACV. The Concept of ACV. To understand insurance deductibles, imagine your deductible is $300, and you incur medical expenses for $2,000. You pay the $300 deductible, also called the out-of-pocket cost, and your insurer pays the remaining $1,700. However, if your entire medical bill is $300, you would pay the entire amount and your insurer would pay nothing. Insurance deductibles do not just apply to health insurance. Like comprehensive coverage, collision coverage will pay for damages to your car as long as they don't exceed the car's actual cash value. When your car's actual cash value is exceeded by the repair costs, your car may be declared a total loss. In states where it's available, you're required to buy a collision deductible waiver in conjunction with your collision coverage. comprehensive and collision coverage combined. Birds of a feather flock together, and that's certainly the case with these 2 car-protecting coverages. 1 Comprehensive and collision can help repair or replace your car. 2  These are optional coverages unless your financing or leasing company requires them. 3  You can choose your deductibles, which will impact your premium.  Your coverage limit is equal to the actual cash value of your car at the time of loss.
Your car's original purchase price minus depreciation.