It ultimately is up to state laws as well as an insurance company's guidelines if a car is replaced with a like vehicle or if the owners are paid out the actual cash value (ACV) for it.

Normally an automobile insurance policy is not a replacement policy, rather it is an actual cash worth value policy. The insurance company is thus usually obligated to pay you the amount your car was worth on the day of the accident.

This ACV amount is usually determined by contacting local auto dealers, doing a market survey, the NADA or Blue Book value and also an insurance company's own software. If you disagree with the offer being given to your in-laws for the value of their totaled car, you may wish to help them contact local car dealers to see what they believe the worth of their car would have been before the accident and see if they can buy a replacement vehicle for that amount.

If the amount that this research finds is drastically different from the other person's insurance company's offer then hopefully your in-laws will be able to negotiate with the claims adjuster for a higher amount. With their settlement they should be able to then buy a vehicle in similar condition to the car they lost without car payments.