What must an insurer offer when settling the total loss of a current model vehicle?

When settling the total loss of a current model vehicle, an insurer is obligated to offer the most favorable option to the insured. This means that the insurer should take into consideration the needs and rights of the insured party to provide a resolution that best serves their interests.

In practice, this can involve offering options such as a cash settlement that represents the fair market value of the vehicle, or providing a replacement vehicle of equivalent value and condition. The goal of this requirement is to ensure that the insured receives adequate compensation and is not placed at a disadvantage after experiencing a loss.

By framing the settlement options in terms that are most favorable to the insured, the insurer fulfills its duty to protect the interests of policyholders, fostering a fair and transparent claims process. This approach is aligned with principles of good faith and fair dealing that guide insurance practices.