How Do Insurance Companies Value a Total Loss Vehicle

A total loss is a situation where the cost of repairing a damaged car would exceed the vehicle’s market value. The cost to repair the car that the insurance company calculates includes: the cost of the repairs required to restore the car to use, the value of the remaining parts, and the costs of reimbursing the driver for rental service expenses incurred. This value is compared to the value of the car after it has been repaired. In case the cost to replace the car is lower than the cost to repair, insurance companies will pay out the lesser cost, which means paying for the cost of buying the replacement vehicle. This is often called paying “replacement value,” or “totaling out” the car.

Filing for a total loss claim is more complicated than getting a vehicle repaired. Insurance companies determine the actual cash value by using their company’s database of values, which is based on prevailing market rates. From this amount, they remove the amount of your deductible and any other amounts reducing the value of the car. Other variables that are factored in include the value of the car in its pre-accident condition, mileage, special equipment and features, and improvements that were done before the car got totaled. The value that they will give you will tell you their assessment of the cost of a comparable car.

Insurance companies usually offer a price that is less than what the car owner expects to receive. This does not mean that you deserve less. The amount that you should be able to receive is the replacement cost minus depreciation costs. Even if you think that you have been compensated enough, you may always be entitled to an independent assessment of the value of your vehicle. You may always be entitled to a fair settlement.

Have You or a Loved One Been Involved in an Automobile Accident?

If you or a loved one has been in an auto accident, you should consider contacting a Rhode Island attorney with experience in handling these types of cases. The personal injury attorneys of the Rhode Island law firm d’Oliveira & Associates, would like to meet with you and discuss the investigation of your automobile accident. Our law firm has represented and assisted numerous automobile accident victims in bringing lawsuits against other drivers and insurance companies alike, and there are no fees unless we are successful.

To have a member of our law office contact you, please fill out a contact form or call us at 1-800-992-6878.