If an automobile has an actual cash value (ACV) of $500 and attached equipment valued at $1,200, what would the insurer pay if the automobile was declared a total loss?

When determining the payout from an insurer for a total loss of an automobile, it is crucial to understand the concept of actual cash value (ACV). The ACV is typically calculated as the replacement cost of the vehicle minus depreciation. In this case, the automobile’s actual cash value is stated as $500. This means that, despite the attached equipment having a value of $1,200, the insurance payout will be based on the ACV of the automobile itself.

In this instance, since the vehicle is declared a total loss, the insurer would pay the actual cash value of the automobile, which is $500. The value of the attached equipment is not included in the payout for the automobile unless it is also specifically covered and valued under the insurance policy. Therefore, the correct payout in this scenario is determined solely by the ACV of the automobile, resulting in a payment of $500.