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Q

Exactly how is the "cash value" of an auto determined after a total loss?


A

Every insurance company has their own internal rules that are used to determine actual cash value (ACV). Determining the ACV is subjective and we know of no standard table that is used. Determining ACV takes into account the effect of depreciation due to wear, condition and age.

Most insurance company claims departments use a computerized evaluation process to assist them in determining the value of your vehicle. Insurance companies purchase third party computer systems (like CCC) that help them estimate costs in automotive claims and collision repairs. Third party software supplies insurers with software and a database that helps determine the value of a vehicle based upon automating the claims process. These systems have databases and systems that contain benchmarking tools to find the true value of a vehicle from repair shops and dealers.

"Actual Cash Value" is the cost to replace an item of property at the time of loss, less an allowance for depreciation. Remember that a deductible may apply.

Please refer to your insurance policy for specific information.

Comment Update: You can use some of these resources to help determine the value of your vehicle (visit their used car sections):

  • Edmunds.com - www.edmunds.com
  • Kelly Blue Book - www.kbb.com
  • NADA guide book - ww.nadaguides.com

Comment Update: The basic criteria is listed above. Typically, the trade in value at one of the sites listed above will give you a good starting point. Each company uses different databases. After an amount is determined you can ask how the company arrived at that amount.



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9 Responses to "Exactly how is the "cash value" of an auto determined after a total loss?"
  1. Anonymous

    Give me a % I can work with. Not this mumbo jumbo.

      Reply»  
  2. Anonymous

    Answers were clear, but the reader understood that there are no surefire formulas related to cash value. Thank you!

      Reply»  
  3. Anonymous

    What are the basic criteria and can the average car owner access the databases?

      Reply»  
  4. Anonymous

    This is the best site for car insurance information. My car was totaled and now I understand some of the ins and outs of this confusing insurance industry. Thanks.

      Reply»  
  5. Anonymous

    Thank you! I was checking to see if the adjusters claim that you take 80% times the cost to repair prior damage and deduct that from the Retail Value was STANDARD? Or the Standard used by this particular company? I appreciate learning that it depends and is somewhat negotiable. It would be great if a "rule of thumb" percentage or a range was included in your answer.

      Reply»  
  6. Anonymous

    The questions itself was not answered

      Reply»  
  7. Anonymous

    This is the best explanation of "actual cash value" that Ive found on the Web.

      Reply»  
  8. Anonymous

    very true

      Reply»  
  9. Anonymous

    This does not help the insured because they have no way of determining what the cash value of thier vehicle is worth compared to the insurance companys. The question explains how the insurance companies come up with what they think is the cash value of the vehicle with no way of the consumer to compare with.

      Reply»