Vehicle Value Calculation by Insurances

[mactube]

How do insurance calculate the value of cars in case of a total loss ?

I'm trying to evaluate if it's even worth it to keep a full coverage insurance on a car, if the car is older.
In this case, the car has over 200k miles on it, which usually has quite a big effect on the resell value but the prices for used cars are still so high, that this car which is valued between $1500 and $3500 on Kelly Blue Book ( depending on dealer, private sale or trade in )
will still sale for 4-5k on the open market in California.

 

[Newby]

I would not carry coverage on a car that you can replace for $3,000.

They go with book values. But it’s crazy to insure small stuff.

 

[adjusterjack]

I'm trying to evaluate if it's even worth it to keep a full coverage insurance on a car, if the car is older.

That's a personal choice depending on how much you pay for comprehensive and collision coverage vs what the actual cash value is vs how much money you have set aside to immediately replace the car if it is wrecked or stolen and there is nobody but you to pay for it.

will still sale for 4-5k on the open market in California.

Which means you will pay 4-5k to replace it with a comparable car. That's the factor you should be concerned about. At the time of the loss, the insurer will look at actual sales of comparable vehicles. If verifiable sales are in the 4-5k range then that's what the insurance ACV will be.

Now factor in what your premium for comp and collision is, what your deductible is and how much money you have to set aside to replace your car.

 

[mactube]

Ok thank you thats good advice .. ACV .. I wonder if they look at online sales and if you can argue the actual ACV in your area by providing online listings of cars.

 

[Al3x Lee]

Ok thank you thats good advice .. ACV .. I wonder if they look at online sales and if you can argue the actual ACV in your area by providing online listings of cars.

Yes, these are often referred to as comparables, or 'comps.' You can find comps from various sources, including online platforms like Facebook Marketplace, Craigslist, Cars.com, AutoTrader, and others.

Ultimately, the insurance company is only responsible for compensating you for the value of your loss. Comps serve as proof of that value, which you can present to a claims adjuster. The more credible your comps are, the stronger your case will be.

ACV, or Actual Cash Value, is the amount an insurance company will pay you for your vehicle if it’s declared a total loss. For an older vehicle, the ACV reflects its market value just before the damage or accident occurred. This value considers factors such as the car's age, mileage, condition, and market demand.

To determine the ACV, insurers often rely on comparables, which are listings or sales of similar vehicles in the same area. If you disagree with the insurer’s ACV offer, you can gather your own comps. The goal is to present evidence of what similar vehicles are selling for to ensure you’re compensated fairly or 'indemnified' for your loss.

 

[fed up]

Beware of ads for comparable vehicles though. Sales are meant to bring a profit so a listing for a vehicles at $4000 would have a profit built in and the car might be worth $3200.