How is payment calculated for a vehicle declared a total loss due to theft that has not been recovered?

When a vehicle is declared a total loss due to theft and has not been recovered, the payment is typically calculated by determining the actual cash value of the vehicle at the time it was stolen, and then subtracting the deductible stipulated in the insurance policy. Actual cash value is essentially the replacement cost of the vehicle minus any depreciation that reflects its age and condition prior to the theft.

This method ensures that the policyholder receives a fair amount that acknowledges the vehicle's value while also considering the amount they have agreed to cover themselves through the deductible.

In contrast, options that mention replacement cost without considering depreciation or involve other types of value assessments, such as market value or insurance premium returns, do not conform to standard insurance practices for total loss settlements, which focus on actual cash value minus any deductibles. This makes the correct option not only the most commonly accepted but also the most logical approach for assessing the financial impact of the loss due to theft.