There are two answers to your question. Yes, an insurance adjuster can use the Kelley Blue Book (KBB) or even the NADA Guides as a resource when determining a car's value. But no, they are not required to use the KBB as a resource or have to declare your car is worth the same as what the KBB quotes for your model automobile.

Your vehicle's value is normally determined by comparing your vehicle's condition to similar vehicles. When calculating the value of your car a claims adjuster may use resources such as the Kelley Blue Book but he or she will usually also include input from local auto dealers, private parties or recent sales which the adjusters use in their valuation. Condition, equipment and mileage differences are taken into consideration.

In addition, an insurance company may 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.

In California the Department of Insurance defines actual cash value (ACV) as the fair market value for a vehicle. The fair market value of an item is the dollar amount that a knowledgeable buyer (under no unusual pressure) is willing to pay, and a knowledgeable seller (under no unusual pressure) is willing to accept. Thus an adjuster in CA will likely discuss your vehicle with local dealers to determine what value these knowledgeable buyers/sellers would place on your vehicle in the condition it was in before you were rear ended.

Since you already know that the adjuster working your claim has not taken into account the KBB value for your car, you should ask them what they did use to determine the car's value.