Why auto insurance coverage written on an actual cash value (ACV) basis is preferred in Ohio

It avoids the problem of over and under insurance. It is not necessary for the auto insurance company to inspect each car prior to coverage, or as an alternative, to guess at its precise value at the inception of the contract. As such, the problem of declining values over the contract is avoided.

• It provides better coverage for the insured. If the Ohio resident adds new equipment or tires to the car, has a new motor installed, or has the car repainted, the insurance protection changes automatically with the enhanced value of the auto.
• It simplifies handling. There is no problem of arriving at the amount of auto insurance to be stated. It is unnecessary to multiply amounts of insurance by rates in order to compute auto premiums in Ohio.
• It minimizes moral hazard. The consumer is not tempted to make a valued contract out of a contract of indemnity. Nor can it use a stated amount as an instrument of unfair competition.
• It reconciles the treatment of comprehensive claims without confusion with collision claims, which are nearly always paid on an actual cash value basis

NOTE: If you own an antique vehicle, please contact your auto insurance agent or broker to obtain replacement cost  or stated limits auto policy.