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<br />Insured Name: CALDWELL FIRE DEPARTMENT, INC <br />Tuesday, March 11, 2025 Page 24 <br />Deciding on an appropriate agreed value for each of your emergency vehicles is not an easy task,but it is an <br />important one.Below are some tips you may find useful.But first,let’s briefly review the coverage provided <br />by VFIS’agreed value endorsement (AU1002). <br />In the event of a loss to a covered vehicle,we’ll pay the least of the following: <br />1.the cost to repair the damaged property; <br />2.the cost to replace a part or parts of the damaged property with a part or parts of like kind and quality, <br />without deduction for depreciation; <br />3.the cost to replace the entire covered auto and its permanently attached equipment with a comparable <br />new auto and permanently attached equipment manufactured to current standards;or <br />4.the agreed value stated in your policy declarations as applicable to the damaged or stolen property. <br />As you can see,you will never receive more than the agreed value you have chosen. <br />Your first step is to estimate,for each vehicle,both its actual cash value (market value)and what it would <br />cost today to replace it with a new vehicle designed,as closely as possible,with the same specifications. <br />(Keep in mind that you should include permanently attached equipment in these values.)The agreed value <br />you eventually select should be somewhere within this range.Why? <br />If the agreed value is less than the actual cash value of the vehicle,our agreed value coverage could actually <br />penalize you in the event of a loss.You may be better off with the actual cash value coverage that’s common <br />in the insurance industry.On the other hand,if the agreed value you select is more than the replacement <br />value of the vehicle,you would be paying premium for an amount of coverage you would never be able to <br />collect.As stated above,the policy will never pay more than the replacement cost or the agreed value, <br />whichever is less. <br />Some considerations you should make when determining a lower boundary include age of vehicle,general <br />condition,how it is equipped,and how easy it would be to replace. <br />So you’ve set the lower and upper boundaries.Within that range,what agreed value is right for your <br />organization?The answer depends on what you would likely do if the vehicle was damaged beyond repair. <br />� <br />If so,you should choose an agreed value close to the low end of the range. <br />� <br />If so,you should choose an agreed value at the estimated current cost of the vehicle you have <br />in mind. <br />� <br />If so,you should set the agreed value at the high end of the range. <br />� <br />If that’s the case,consider deleting physical damage coverage from the vehicle. <br />The discussion above involves payment of the agreed value limit when a vehicle is damaged beyond repair. <br />Be aware of another consideration in choosing an agreed value limit –in the majority of accidents,the <br />vehicle is repairable.When a high agreed value is chosen,damages from even a severe accident may not <br />involve an agreed value limit payment.The policy provides that a vehicle is repairable if it can be repaired for <br />up to 60%of the agreed value.High agreed value limits allow for extensive repairs,even on older vehicles <br />with low market values. <br />Docusign Envelope ID: 98CFD7CD-5E86-4B80-B3CD-3F09E1F5D0CF