In the case of vehicle theft, what is the effect of the deductible on the claim payment?

When dealing with a claim for vehicle theft, the deductible directly impacts the amount the insured party will receive. In this context, the deductible is the amount that the policyholder is responsible for paying out of pocket before their insurance coverage kicks in.

In the event of a vehicle theft, the insurance company assesses the actual cash value of the stolen vehicle—this value reflects the vehicle's worth at the time of loss, taking into account factors such as depreciation. The deductible is then subtracted from this calculated actual cash value to determine the final payout to the insured.

For example, if the actual cash value of the vehicle is $10,000 and the deductible is $1,000, the insurance company would pay out $9,000. This method ensures that the insured has some financial responsibility for their vehicle while still providing compensation for the loss incurred.

Other options do not align with how deductibles are typically applied in insurance claims. Adding the deductible to the total cash value would incorrectly increase the payout, while ignoring it would suggest that the insured has no financial responsibility, which is not typically the case. Similarly, setting the deductible as the minimum payout would not reflect the standard practice of deducting this amount from the claim payment. Thus, the correct answer highlights