After a car accident, how is the value decided for your vehicle if it is determined totaled?

December 18, 2003 9:08 AM

When you are involved in a car accident, how is the value decided for your vehicle if it is determined totaled? I imagine it has something to do with the Kelley Blue Book price, but is it what the retail price of the car would be or the trade-in value or what? Or does it have absolutely nothing to do with any of that? And what consideration does the insurance company take if you owe more than they value it? Merry Christmas to me.
posted by nramsey to travel & transportation (6 comments total)

What a coincidence, the Quark document I have open (a legal reference for students) just happens to address this question:

What if the insurance company “totals” my car?
If the car repairs are estimated to cost 70% or more of the actual cash value of the car, an insurer will usually “total” the car and offer to buy the car from you for the actual cash value of the car. An industry benchmark for determining the value is the National Automobile Dealers Association Used Car Guide (“Blue Book”), but you should also get price quotes from used car dealers and newspaper used car ads.

If the insurance company wants to “total” my car and I want to fix it, what can I do?
You can keep your car if you are willing to subtract its salvage value from the insurance settlement. You can get estimates from salvage yards.

What if I do not agree with the amount that I am offered to “total” my car?
Your policy offers a procedure called “appraisal” as a way to resolve the dispute. You and the company each choose a damage appraiser who selects an umpire. An estimate agreed to by any two of these three people is binding. Each party must pay its chosen appraiser and split the other expenses of the appraisal process.
posted by whatnot at 9:13 AM on December 18, 2003

NADA Guide.
posted by monju_bosatsu at 9:28 AM on December 18, 2003

I "totaled" my VW Camper some years back. I bought it back from the insurance company for something like $350.00 (nothing to do with the value, this is the set price for buying back a total loss).

Now, their settlement to me, as the insured, was set at something around $1200, if I recall correctly. I told them the car was worth much more. Prove it, they said. I scoured for ads of other Campmobiles of similar edge etc for sale, and convinced the insurance company that the car was worth about $2400.00. They cut me a check for that amount.

(That's when I bought the thing back and fixed it for $800 -- then proceeded to blow the rest on rent in Cambridge, MA).
posted by Dick Paris at 11:31 AM on December 18, 2003

As others have said, they just pay what NADA thinks you could have sold it for. This has nothing to do with the actual value of the vehicle, or the replacement cost.

My car was totalled last month, and not only did they not pay me enough to buy a replacement, but they didn't even clear out the loan. I bought it pretty recently, so I've been paying mostly interest, and the car has depreciated faster than I've made payments against the principal. So I'm out the car and still have six months or so of payments to make before I can start saving up for a down payment on a new one. I hope you are more fortunate.
posted by Mars Saxman at 12:23 PM on December 18, 2003

i would look for comparable values - i had bought a mint 80's landcruiser in california that was totaled about a year later... obviously similar vehicles in minnesota would be rusted ... so i did my homework using autotrader.com and was a able to make a good case to the insurance company for a substantially larger payment.

good luck.
posted by specialk420 at 1:46 PM on December 18, 2003

speciak420: what model was it? FJ40? FJ60? My family has a 1984 FJ60 wagon with the 4 speed stick shift. I will NOT let it leave my family. A truly spartan vehicle. Great truck!
posted by gen at 4:09 PM on December 18, 2003