car insurance

If your car is stolen or declared totaled following an accident, an insurance adjuster will determine the value of your car at the time of the theft/accident and reimburse you depending on the terms of your policy. In some cases, the adjuster may come up with a car valuation figure that is way lower than the actual value of your car. In such a case, you can dispute the valuation if you deem it unfair.

How Insurers Determine a Car Valuation

Provided you have collision or comprehensive coverages, you can file an auto insurance claim if you’re involved in a car crash with another vehicle. Alternatively, you can file a claim against the at-fault party. If your car is damaged beyond repair, an insurance adjuster will calculate the actual cash value of your car to determine your compensation. It is important to note that different states define the actual cash value (ACV) differently. For instance, while it may mean the cost of replacement less depreciation in some states, other states don’t consider the depreciated value. Therefore, to make your claim process easier, you should understand what it means in your state. Some of the factors that insurance adjusters consider when conducting car valuations include:

  • Model, make, and year
  • Condition of the car before the damage
  • Price of similar cars in the market
  • Mileage at the time of the damage
  • Depreciation
  • The salvage value

Negotiating a Settlement

It is important to note that, during the valuation process, an insurance adjuster can come up with a ridiculous figure. In such a case, you should go through the valuation report thoroughly in order to understand how the adjuster arrived at that figure. In case you don’t agree with the report, consider negotiating for a higher payout.

During the negotiations, be sure to mention any special features in your car that the adjuster might have missed, the estimated retail value of the car, comparable sales prices of similar cars within your locality, and any other helpful information. Note that negotiating for a higher settlement does not guarantee that the insurance company will accept your new offer. In case you don’t succeed through negotiations, you can use alternative dispute resolution mechanisms, such as mediation. If that fails, too, you can file a lawsuit.

Agreed Value Vs. Stated Value

The car valuation process for collectibles or classic cars is somewhat different, considering these cars don’t always depreciate like regular cars. In case your classic car gets totaled, your valuation amount will depend on either of these options:

  • Agreed value – During insurance underwriting, you and your insurer will agree on a certain value to be paid out in case of total loss. Because a classic car tends to appreciate value over time, you should regularly review the agreed value.
  • Stated value – Instead of paying for the full replacement cost of a car, this policy covers the actual cash value or stated value at the time of the total loss, whichever is lower.

Each of these options has its own pros and cons. For instance, while the agreed value option guarantees you more financial security, it is typically more expensive than the stated value.

Those are some of the key facts to know about car valuation and insurance. Talk to the experts at Sausman Insurance Agency for help finding reliable auto insurance coverage. We serve Mifflintown, Millersburg, and beyond with quality policies, and we look forward to assisting you in securing reliable and comprehensive coverage that suits your needs and budget.