How Does the Insurance Company Calculate Value of Totaled Vehicle?
If you're faced with the unfortunate situation of being involved in an auto accident that totals your vehicle, you can recover damages from your insurance company if you have comprehensive or collision coverage. Your insurer considers several factors when determining your car's value.
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Identification
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A totaled vehicle doesn't necessarily mean that it is demolished. Insurance companies also consider factors such as the age and mileage of the vehicle when determining whether it is a total loss.
Method
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Your insurance company will determine the actual cash value of your vehicle (ACV), which is the amount you'll actually receive after subtracting the deductible (the amount you pay before coverage goes into effect). ACV is calculated as a percentage of the vehicle's actual worth, taking into account depreciation. The company will then sell the vehicle for salvage.
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Considerations
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If you don't agree with your insurance company's assessment of your vehicle's value, you can take it to arbitration where an impartial third party makes the final determination. As a last resort, you could also sue the insurer.
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References
- Photo Credit wrecked car image by hazel proudlove from Fotolia.com
