How to determine insurance value of a totaled car?

August 15, 2006 11:58 PM

How can I determine the insurance company's likely valuation of a totaled car? The Kelley Blue Book and Edmunds valuations are strikingly different.

And is there any way to estimate how much the claim would affect insurance premiums (and for how long)?

posted by Ø to work & money (10 comments total)

The insurance company's valuation is usually based on what it will cost them to replace your car from the used car market in your area. If you feel they are shortchanging you, you can always ask them for the paperwork they used to determine the value of the car. When our car was totaled, that was about 15 pages of used car ads. Check out their paperwork to make sure all your accessories are included. In our case, they did not include the tape player, and we pointed it out, and they upped the price.

Also, they are supposed to cover the sales tax (at least in MN).

No idea on the premium.
posted by hariya at 12:44 AM on August 16, 2006

Edmunds is correct. Kelley Blue Book is more like "what car dealers would like you to believe when you're buying from them", while Edmunds has the real-life price that you're likely to get.
posted by evariste at 1:30 AM on August 16, 2006

(The insurance companies don't actually use Edmunds, but Edmunds is a lot closer to reality than Kelley)
posted by evariste at 1:30 AM on August 16, 2006

From everything I've seen and heard, car dealers use the NADA. But in my one first hand experience with totaled car insurance company valuation, it appeared that the insurance company used their own internal database/guide/system. Their represenative came out to the house (yeah, we had it towed home), looked it over, and "called it in" on her cell phone. She provided make, model, specifics on the damage, an assessment of the car's condition pre-wreck, etc. Whoever was on the other end (presumably someone in some department of the insurance company) spit back a number and that was the amount on the check.
posted by Clay201 at 5:44 AM on August 16, 2006

I should have elaborated...

The NADA book gives three values for a car (this after taking into account condition, options present, number of miles on the odometer, etc.).

There's the wholesale value, which is the figure car dealers use when deciding how much to bid for a given car at a wholesale auction. Then there's the "loan value," the amount you can expect the bank to loan you on a given car. And finally, the retail value; the average price you should expect to pay if you buy the car for cash. (Guess which price is the highest?).
posted by Clay201 at 5:51 AM on August 16, 2006

kbb.com gives you the choice of which of three values you want to use. The middle "private party" one will usually be comparable to edmunds.
posted by Sprout the Vulgarian at 6:30 AM on August 16, 2006

I'm in a similiar situation myself (just involved in an accident - it was the other guy's fault and the vehicle he was driving was uninsured).

My car, a 98 mercury tracer, would cost 4700 to fix the front end damage + replace airbags.

State Farm decided to total it out. The way they figured it out was: take NADA value, subtracted about 1700 for some "prior damage" (I had a dent in my bumper and the one of the rear panels in the back had been damanged) and added on a rough estimate of tax to buy a new car.

It came out to be about 3300... the unforunate part is that while I guess its an accurate valuation of my actual car, I'm going to be hard pressed to find a similiar car for that price to purchase.

Still haven't accepted their offer yet.
posted by finitejest at 6:32 AM on August 16, 2006

insurance value is usually close to or a little less than "trade-in" value.
posted by Sprout the Vulgarian at 6:39 AM on August 16, 2006

My experience was dealing with Geico when one of their insureds totaled my car. They took the value of three cars, same make model year approximate mileage etc., even color, for sale at three dealerships within 25 miles of me (I'm in LA, so I'm sure local density of cars for sale worked to my advantage) and then they averaged that price (though all were in a couple hundred bucks of each other). The claims person was even nice enough to give me the dealerships where they got the quotes. For the hell of it, I went to the closest one on my way home from work one night and took a look at the car -- it was nearly identical. And the price, including tax and fees and so on and so forth, was a hundred dollars less than they gave me. I ended up buying a different car, but I was quite pleased with the outcome and rather surprised that they hadn't tried to cheat me.
posted by incessant at 12:26 PM on August 16, 2006

Thanks, everyone, for your answers. Very helpful!
posted by Ø at 11:50 PM on August 16, 2006