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What is “actual cash value” in a car accident claim?
If you’re making a vehicle damage claim in the wake of a car
accident, you might hear the insurance
adjuster toss around the phrase “actual cash value” if your car is
approaching the “total loss” designation.
When the cost of fixing your car exceeds the vehicle’s “actual
cash value,” the insurer will deem it a “total loss” and instead of paying for
repairs, will pay to replace the car. This can occur if you’re making a claim
under your own collision or comprehensive coverage, or if you’re making a third
party liability claim with the other driver’s insurance carrier.
But different people can have different ideas of what the
replacement value -- the “actual cash value” of your car -- actually is.
A vehicle’s actual cash value is usually set based on an
examination of the sale price of the same or similar vehicle -- model year,
make, condition, options -- in the same geographic area. One valuation resource
that is usually used is Kelley Blue Book.
If you disagree with the insurance company’s valuation of
your vehicle, it usually means that 1) you don’t think the vehicle should be
designated a total loss (you think the insurer should pay to fix it, in other
words,) or 2) you agree that the vehicle is a total loss, but you think the
insurance company should pay you more to replace the vehicle.
One thing you can do is ask the adjuster how they arrived at
the “actual cash value” figure. Make sure they considered any extra features or
equipment on the vehicle. And do your own research. Look up online ads on
Craigslist and elsewhere, and if they show higher asking prices, bring those
ads to the adjuster’s attention.
by: David Goguen, J.D.
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