Question

Under a BAP, a total loss is settled according to:

Option 1: Actual Cash Value (ACV)
Option 2: Replacement Cost
Option 3: Stated Amount
Option 4: Agreed Value

Answer 1

Under a BAP, a total loss is usually settled based on the 1)Actual Cash Value (ACV), which factors in depreciation from the vehicle's replacement cost.

Step-by-step explanation:

Under a Business Auto Policy (BAP), a total loss is typically settled based on the Actual Cash Value (ACV) of the vehicle at the time of the loss.

The ACV is determined by taking the replacement cost of the vehicle and subtracting depreciation. Replacement Cost, Stated Amount.

Agreed Value are other settlement options that may be used in different types of insurance policies, but for a standard BAP, the ACV is the default method unless the policy specifies otherwise.