What does the personal auto policy typically cover in the event of a vehicle theft?

The personal auto policy typically covers the actual cash value (ACV) of the stolen vehicle at the time of the loss. Actual cash value is calculated as the replacement cost of the vehicle minus depreciation. This means that if a vehicle is stolen and a claim is filed, the insurance company will reimburse the policyholder based on the current market value of the vehicle, which accounts for wear and tear, age, and other factors that affect vehicle depreciation.

This coverage is important for vehicle owners, as it helps them recover some financial loss after the theft, though it may not fully cover the cost of purchasing a new or similar vehicle. Understanding ACV is crucial in recognizing how insurance policies handle theft claims, and it's a common component in many personal auto policies.