The property damage claim for your automobile after an accident can be surprisingly complicated, and you could have many decisions to make. For example, if you have collision insurance coverage, you may want to make your property damage claim with your own insurance company to receive better customer service and the possibility of having your claim paid quicker. However, you will have to pay the deductible and try to recover it from the negligent driver—something you would not have to do if you filed your claim with his company instead.
In addition, you should understand how insurance companies decide how to pay your damaged vehicle claim, so you are certain you receive what you are owed. If your vehicle is totaled, you have the option accepting less money from the insurance company and keeping your car. In order to know if you are getting a fair offer, you need to understand how the salvage value of your vehicle is calculated.
Ways Vehicle Property Damage Claims Are Paid
Your vehicle damage claim can be settled in one of two ways: paying for the cost of repairs or totaling the vehicle and paying you its Actual Cash Value (ACV). If your vehicle is repaired, you may also be entitled to a diminished value payment. This is to compensate you for the reduction in the value of your car.
The insurance adjuster will total your vehicle if the cost of repairing it is more than it is worth or if it would remain unsafe after the necessary repairs were completed. The adjuster would pay you the ACV of your vehicle, which is the amount it would cost you to replace your vehicle with a comparable used one. If you purchased Replacement Cash Value (RCV) coverage, you would be paid the cost to replace your vehicle with a comparable new one.
You may prefer to keep your totaled vehicle and pay to have it repaired rather than replace it. You can do this, but the salvage cost will be deducted from what you are owed and a salvage title would be issued.
How to Calculate Your ACV and the Salvage Value of Your Vehicle
The salvage value of your vehicle is the value that would be received if the insurance company sold it to a salvage yard for its parts and frame. The insurance company would determine the ACV of your vehicle as if you were not going to buy it back and deduct a certain percentage for the salvage value. The adjuster could use a company software program, an Internet site, such as Kelly Blue Book, or an outsource company to determine these figures. Here’s how you can determine the ACV and salvage value:
- Determine your vehicle’s features. You will need to have your vehicle’s model, make, year, mileage at the time of the crash, trim, and any optional equipment. If you do not know this information, you may be able to find it on the vehicle title, contract for the purchase of your vehicle, or in the instruction manual.
- Calculate the ACV of your vehicle. You can use a few websites to help calculate your vehicle’s Actual Cash Value, such as Kelly Blue Book, National Automobile Dealers Association Used Car Guide (NADA), and Edmunds. You will need to obtain the retail value—selling to private party amount—and the trade-in to dealer value of your vehicle. Add these two amounts up and divide the total in half to determine the ACV. For example, if the retail price is $15,000 and the trade-in value is $11,000, you would add them together to get $26,000. Divide this number by two, and the ACV is $13,000. Once you do this using one website, it is a good idea to repeat the process with another website.
- Use alternative methods to determine ACV. If you believe the insurance company’s ACV is too low in comparison to your calculations, you may want to research recent sales of comparable vehicles in the Atlanta area on the Internet and confirm that the vehicles actually sold for these prices. It is a good idea to get three estimates. Another option is to ask a car dealership or repair shop that you believe is qualified to give you an estimate of the Actual Cash Value of your vehicle. However, you may need to transport your car to the facility.
- Determine the salvage value calculation. Every insurance company will use its own formula for calculating the salvage value of a vehicle. It is generally based on the costs of disposing of the vehicle and past auction values for salvaged vehicles. This amount is subtracted from the ACV to determine how much you are paid. Using the example above of a vehicle with an ACV of $13,000, 10 percent would be $1,300. This amount and your deductible would be subtracted from the ACV to arrive at the amount you should receive if you keep your totaled vehicle.
Unlike other law firms, Brauns Law understands the importance of property damage claims to our clients and handles negotiating the settlement of these claims. If you have questions about your property damage claim or need assistance obtaining compensation from a negligent driver who caused your crash, call our office today to schedule a free consultation to learn how we can help you.