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 value (ACV) policy. The insurance company is thus usually obligated to pay you the amount your car was worth on the day of the accident.
The ways in which insurance companies determine the actual cash value of a vehicle vary in their methods. The typical ways in which the claims adjuster will calculate the actual cash value are: comparing your vehicle to local sales of the same model car in similar condition and with similar mileage, blue book or Nada guide values and/or a computerized evaluation process.
If you disagree with the offer being given for the value of your 1997 Toyota Camry you can negotiate with the insurance company by showing them documentation that your car is worth more than their offer. This is usually done by contacting local dealers to see what they can estimate the worth of the car would have been before the accident.
Though ACV is usually paid as the settlement for a car that has been totaled out, Illinois is one state that allows for a replacement car instead of a cash settlement in some cases.
The Illinois Division of Insurance, the insurance regulator for IL, notes that when you file an automobile insurance claim, your insurance company has three options:
- Replace the damaged or stolen property;
- Repair the damaged property; or
- Pay for the loss in cash.
Insurance Department regulations require the company to follow certain standards for each option. The Illinois Division of Insurance has established regulations (50 Illinois Administrative Code, Part 919) to protect you when you file an insurance claim with your own insurance company
The IL Division of Insurance states that if the insurance company elects to replace your vehicle, the replacement must be a specific make and model comparable to your totaled vehicle and it must be available in as good or better overall condition than your totaled vehicle. Replacement vehicles must be purchased through licensed dealers. Vehicles that are not more than three years old must be warranted, since your vehicle is over 10 years old it would not be affected by this.
If you reject a replacement vehicle, the insurance company must pay only the amount it would have otherwise paid for the replacement vehicle including applicable taxes, transfer and title fees.
If the insurance company elects to make a cash settlement for your totaled vehicle, they must first determine its retail value. Companies normally use guidebooks or computerized data marketed by various sources as we mentioned earlier. If your vehicle is not listed in one of these sources, the company can use written dealer quotes. Ordinarily, however, newspaper advertisements are not acceptable sources of market value.
So in Illinois an insurance company can elect to replace a vehicle instead of being paid out a cash settlement for a totaled out vehicle. If you would like a replacement vehicle instead of a cash settlement you should discuss this with Allstate, the at-fault party's insurance carrier. The IL Division of Insurance can give you more consumer help regarding this situation.