Car AccidentsIf you were recently in a car accident, you may be in discussions with the insurance adjuster regarding the damage to your vehicle.
The insurance adjuster may be using phrases such as “totaled car value calculator” or “total loss calculator.”
The insurance company calculates the totaled car value to determine if the car is a total loss and, in their eyes, not worth repairing.
How Insurance Companies Value Totaled Vehicles
When your vehicle is deemed a total loss after a car accident, the next step is determining its value. Insurance companies follow a specific process to calculate the amount they’ll offer for your totaled vehicle, and understanding how they do it can help ensure you’re getting a fair settlement.
What Is a Total Loss?
A vehicle is considered a total loss when the cost to repair it exceeds its total car value. Insurance adjusters will assess the damage and compare the repair costs to the car’s actual market value before the accident. If repairs are more expensive than the car’s value, the vehicle is “totaled,” and the insurance company will offer compensation based on its valuation.
The Role of Actual Cash Value (ACV)
To determine the value of your totaled vehicle, insurance companies typically use the Actual Cash Value (ACV) method. ACV is calculated by taking the replacement cost of the vehicle and subtracting depreciation. This means that the insurance company doesn’t pay for the full price of a new car but rather its value at the time of the accident.
Depreciation accounts for factors like the car’s age, mileage, and condition. A car that’s several years old with high mileage will naturally have a lower ACV than a newer car with fewer miles.
Factors That Affect Your Vehicle’s Value
Several factors influence the ACV calculation and the final settlement offer. These include:
- Vehicle Make and Model: The brand, model, and year of your vehicle play a significant role in determining its market value. Popular vehicles with higher resale values often have higher payouts.
- Mileage: The more miles a vehicle has, the more wear and tear it has experienced. High-mileage cars typically have lower ACVs compared to low-mileage vehicles in similar condition.
- Condition: Insurance adjusters will assess your vehicle’s overall condition before the accident. A car that is well-maintained with minimal cosmetic or mechanical issues will have a higher total car value than one that is in poor condition.
- Market Demand: The demand for vehicles similar to yours in your area also affects its value. For example, if your car is a popular make and model in your region, it may command a higher value in the market.
- Aftermarket Modifications: If you’ve made modifications to your car, such as installing a new stereo system or custom rims, these may add value to your vehicle. However, insurance companies typically only offer compensation for modifications that were professionally installed and documented.
How Insurance Adjusters Use Valuation Tools
Insurance companies use several tools to help determine your vehicle’s pre-accident value. Commonly, they’ll reference:
- Kelley Blue Book (KBB) and NADA: These are two of the most widely used sources for car values. KBB provides estimates based on a variety of factors, including condition and mileage, while NADA focuses more on wholesale prices.
- Local Market Data: Adjusters may also research the prices of similar cars in your area. If there’s a limited supply of cars like yours locally, it could result in a higher valuation.
- Professional Appraisals: In some cases, adjusters may also rely on professional appraisers to assess the value of a car, especially when determining the fair market value is more complex due to vehicle condition or unique circumstances.
What Happens After the Valuation?
Once the adjuster has calculated the ACV of your totaled car, they’ll offer you a settlement based on that amount. The insurance company will deduct your policy’s deductible from this settlement offer. For example, if your car’s ACV is $10,000 and your deductible is $500, the insurance company will pay you $9,500.
If you’re not satisfied with the valuation or feel it’s too low, you have the right to dispute it. You can use tools like a total car value calculator or provide evidence like independent appraisals, maintenance records, and photos of your vehicle before the accident. We’ll explore how to dispute a settlement offer in the next section.
Appealing a Totaled Vehicle Valuation
If you believe the insurance company’s valuation of your totaled vehicle is too low, you have the right to challenge it. Insurance companies may not always offer the fair market value of your car, especially if they undervalue key factors like the car’s condition or market demand. Fortunately, there are steps you can take to appeal the valuation and potentially increase your settlement.
1. Review Your Insurance Policy
Start by reviewing your insurance policy to understand your coverage and any terms related to the valuation of a totaled vehicle. Look for clauses regarding Actual Cash Value (ACV), Total Loss Valuation, and Dispute Resolution. This will help you determine if the insurance company followed the terms of your policy when making their offer.
2. Gather Supporting Documentation
To support your appeal, you’ll need to present evidence that demonstrates the true value of your vehicle. Here’s what you can gather to make your case:
- Independent Appraisals: Consider hiring an independent appraiser to provide a professional assessment of your vehicle’s market value before the accident. An independent appraisal can carry significant weight in the appeal process, especially if it provides a higher value than the insurance company’s estimate.
- Maintenance Records: If you’ve kept detailed maintenance records showing that your vehicle was well-maintained, this can help demonstrate that your car was in better condition than the insurance company’s assessment suggests.
- Photos of the Vehicle: Provide clear photos of your vehicle taken before the accident. These photos should show that the car was in good condition, highlighting aspects like the exterior, interior, and any recent upgrades or repairs.
- Comparable Vehicles: Research the current market and provide listings of similar vehicles in your area. If you find cars of the same make, model, year, and condition being sold at a higher price, this can be used as evidence to justify a higher valuation for your vehicle.
3. Submit a Formal Appeal to the Insurance Company
Once you’ve gathered your documentation, submit a formal appeal to the insurance company. This can usually be done in writing or by filling out an appeal form if one is provided. Make sure to:
- Clearly state that you’re appealing the valuation of your totaled vehicle.
- Include a detailed explanation of why the valuation is too low, referencing the evidence you’ve collected.
- Provide a suggested settlement amount based on your research and documentation.
4. Negotiate with the Adjuster
After submitting your appeal, the insurance company may offer to re-evaluate their valuation. In some cases, they may come back with a revised offer that better reflects the true value of your vehicle. Be prepared to negotiate with the adjuster. If they present a higher valuation, but it’s still lower than what you believe is fair, don’t be afraid to push for a higher settlement.
5. Seek Help from a Lawyer or Appraiser
If your appeal is denied or you’re unable to reach a satisfactory agreement, you may want to seek professional help. A lawyer who handles insurance disputes can assist with your case, providing guidance on the best steps to take and helping you negotiate with the insurance company.
Alternatively, working with an appraiser can provide additional evidence to support your appeal. In some cases, the insurance company may be more willing to adjust their offer once presented with expert testimony.
6. Consider Alternative Dispute Resolution
If the negotiation process doesn’t lead to a satisfactory outcome, you may have the option to pursue alternative dispute resolution (ADR), such as mediation or arbitration. ADR methods allow both parties to work with a neutral third party to reach a resolution without going to court. This can often be a faster and less expensive option than litigation.
7. Take Legal Action if Necessary
If all else fails and you are unable to resolve the dispute, you may consider taking legal action. A lawsuit could be necessary if the insurance company refuses to settle or continues to undervalue your vehicle despite the supporting evidence you’ve provided.
Totaled Car Value Calculator
Generally, in Texas, when the cost to repair the vehicle exceeds the vehicle’s actual cash value (ACV) the insurance company will purchase your car for fair market value rather than repair it.
In other words, if the total cost of repairs is greater than the ACV, then the insurance company considers it a total loss and it totals the car.
For example, if the cost to repair your damaged vehicle is $10,000 but the fair market value is only $5,000, then the insurance company will total the vehicle.
The Texas Transportation Code provides the formula and guidelines by which the totaled car value is calculated.
What Can I Recover If My Car Is Not Totaled?
If your vehicle is not totaled and is repairable you may still have a claim for the car’s diminished value, in addition to the cost of repairs.
The diminished value is the difference between the fair market value of your car before and after the accident.
How Do I Determine the Diminished Value of My Car?
Typically, every insurance company has their own formula for determining the diminished value of a vehicle, but there are general guidelines they must follow.
Under Texas law, several factors affect a car’s diminished value including:
- Extent of damage,
- Cost of repairs,
- Quality of the repairs made,
- Past and future market trends,
- History of prior accidents, and
- Cost of a similar vehicle with no accident history.
How to calculate the diminished value of a wrecked car will depend on factors specific to your vehicle, the damage sustained, and quality of repairs.
To determine whether you may have a claim for diminished value contact the attorneys at The Zimmerman Law Firm.
Will I Still Have a Claim for Diminished Value If I Lease My Car?
Generally, if you lease your car you cannot file a diminished value claim because you are not the owner of the car.
However, there are rare exceptions, and your ability to recover will depend largely on the exact wording in your lease agreement and the individual lessor.
Occasionally, the lessor will allow the lessee (you) to pursue a diminished value claim.
If you have a lease, your car accident diminished value claim will be determined in the same manner as if you owned the car.
Working with an insurance company after you’ve been in a car accident can be time-consuming and cumbersome.
Whether you are facing a total loss or a diminished value claim, it is best to consult with an experienced attorney.
Contact The Zimmerman Law Firm for a 100% Free Case Review
If you have recently been in a car accident, reach out to The Zimmerman Law Firm for a free consultation.
If you are wondering how the car accident diminished value calculator will affect your claim or are unsure if your car is totaled, we can help.
We have years of experience delivering positive results to our car accident clients. Contact us today to get started.
Our Waco, Texas Office Location
Michael Zimmerman
Michael was born in Houston, Texas. His education at Baylor and Texas State Universities earned him a Bachelor of Science degree in 1987. His major was in Biology with a Minor in Chemistry. He finished his legal education at Texas Southern University in 1990, earning a Juris Doctorate from Thurgood Marshall School of Law. He was admitted to the State Bar of Texas in 1990.
Rate this Post
Loading...