When purchasing auto or boat insurance, there is often a section that stipulates whether you'll receive the actual cash value or the replacement cost of the vehicle in the case of a severe accident. But which insurance coverage should you choose? Wilson Insurance Agency of Dalton, GA, is here to help you understand the pros and cons of each as you select the ideal policy for your needs.

Should Your Insurance Coverage Include Actual Cash Value or Replacement Costs?

What Actual Cash Value Covers

As your car or boat ages, its blue book value can decline much faster than it would cost to replace the machine. For example, a five-year-old car may still be worth $15,000, even if you purchased it for $20,000. The actual cash value of the vehicle will likely enable you to get into another one without too much economic strain. On the other hand, your 1999 Ford is probably valued around $2,000. What kind of transportation could you manage to purchase for just two grand if your car was totaled?

What Replacement Value Covers

If you opted for replacement value in your insurance coverage, and your classic boat or car was totaled in an accident, you would be compensated for its fair market value, which is often agreed upon by the insurance company and the purchaser when the policy is put into place. Instead of wondering how you would get to work, you'd likely have the funds to get yourself into a functioning vehicle.

Should you have actual cash or replacement value in your insurance coverage? It all depends on your individual circumstances. It might be tempting get a fast policy when sitting at the dealership, but taking the time to ask your agent for pointers and information could help you out in the long run. When you’re ready to get a quote, call Wilson Insurance Agency in Dalton at (706) 278-0549 or visit their website for more information.