Vehicle accidents often result in the values of cars depreciating more than they would otherwise, even if the vehicles in question seem outwardly functional or bear relatively few cosmetic defects. In order to determine the post-accident worth of such vehicles, owners and insurance assessors must take a number of factors into account.
When computing the value of a damaged vehicle, which is also known as the Actual Cash Value, assessors usually look at three major components. In addition to referencing the value that a comparable, non-damaged vehicle would have in an auto book, like Kelley Blue Book, insurance firms also calculate the fair market value of the vehicle, which accounts for its wholesale or retail cost after the accident damage is taken into consideration. Finally, insurers may or may not decide to account for the total replacement cost of the vehicle; note that such calculations are usually only applied when vehicles are relatively new.
Remember that different states have specific rules governing ACV calculations and insurance payouts. For instance, the Washington State Office of the Insurance Commissioner notes that insurance taxes on totaled vehicles must be calculated in a way that compensates the vehicle’s owner for the yearly taxes and fees that have already been paid but remain unused. Regional laws may also address who is held responsible for the diminished value of a vehicle following an accident. In jurisdictions like Connecticut and other states, third party claims can be submitted against negligent drivers and their insurers.
Although drivers can get a general base for their vehicle’s diminished value by looking it up in Kelley Blue Book or the National Automobile Dealers Association, this is only a preliminary step. In order to compute an exact value, most motorists have their cars assessed by a professional insurance claims adjuster who can calculate the costs of specific kinds of damage. To learn more about adjusting the value of a vehicle following an accident, contact a lawyer familiar with the laws in the state where the accident occurred.