Insurance Auto Value

Inherent diminished value is the most common form of diminished value and it happens when a car loses value because it has a damage history. Car insurance companies can use their own formulas for determining your car s value or they can use a site like kelley blue book or nada to determine your car s value. Exceptions include agreed value policies usually for classic cars stated value policies.

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Many auto insurance policies use cash value as the payout factor for repairs or replacement.

Insurance auto value - A diminished value insurance claim is when you request an amount of money from your car insurance company to compensate you for the difference between your car s value before the repairs prior to the accident and its current value now that it has been repaired. If your car is totaled in an accident meaning the cost to fix it is more than a certain percentage of the car s value then your insurance company will pay out the actual cash value or acv of your car. Most traditional car insurance policies cover vehicles using actual cash value deciding it s not worth repairing your vehicle if the repairs will cost more than a certain percentage of the damaged car s value generally in the neighborhood of 80.

According to kelley blue book if you currently drive a 2010 acura mdx with 50 000 miles on it your car is currently worth 24 263 if it is in very good condition. That means that assuming you have comprehensive and collision coverage which cover damage to your vehicle you ll be paid the value of your car before the collision that totaled it. The auto insurance algorithm used to calculate whether a car is repairable or a total loss is a closely guarded secret and the formula can be affected by state law as well.

If the repair cost is 70 to 75 percent of the vehicle s pre accident actual cash value or more it s a write off. But a good rule of thumb is this. A car s value.

When your vehicle is totaled in an auto accident your insurance company pays you for the totaled car value or more accurately it pays you for what it claims the value to be. When your car is severely damaged or totaled in an accident your auto insurance company uses the value of your vehicle to determine your payout depending on the amount of coverage you have the insurance company may reimburse you for the repairs or declare a total loss and help you pay for a new car. Cash value is not the same as replacement value and it is important to understand the difference.

In order to determine this amount car insurance companies. Cash value is based upon the actual value of the car at the time of the repair or replacement. This value can easily amount to a few thousand dollars for newer vehicles.

With this type it is assumed that any needed repairs were made by a licensed highly trained mechanic and that the car is performing and driving as it should.