When it comes to determining the Actual Cash Value (ACV) of a vehicle, insurance adjusters take into account several factors such as mileage, age, signs of wear and tear, and accident history. The ACV is the cost of replacing the vehicle minus the deductible for comprehensive or collision insurance. The adjuster's job is to estimate what a reasonable cash offer for the vehicle would have been before the accident occurred. To assess any damage related to an accident, the adjuster will use a computer program to generate an estimate of repair costs.
If there are any questions or discrepancies about the damage and repairs, you can consult a mechanic or car body repair expert. The insurance company will use Actual Cash Value (ACV) to determine the stroke of your damaged car. ACV is the current market value of the car minus depreciation. It also takes into account any damage or wear and tear.
After deducting your deductible for physical damage claims (i.e., comprehensive or collision coverage), you will receive an amount equal to the ACV of your car. If you want to dispute the value determined by your insurance company, you must provide evidence that your car's value is higher than what they have calculated. You will need to present detailed records of your car's maintenance as well. While ACV decreases over time due to depreciation, replacement value may not decrease as quickly.
Once the adjuster has determined how much the insurance company is willing to pay for repairs, you can either accept payment and make repairs or reject the evaluation and try to negotiate a better deal. Researching your car's value with KBB, Edmunds, NADA, or even an outside appraiser or claims adjuster can help you determine its worth and give you an idea of what a fair payment should be for resolving a claim. These values usually differ from what your insurance company has determined as ACV since they consider depreciation and replacement costs when calculating it. The Actual Cash Value of your vehicle is different from its retail value which is what you paid for it when you bought it.
Most insurance policies cover ACV in case of a claim and use a third party to determine it. In case of an accident, your car insurance company can use the fair market value of your car to calculate its ACV. Edmund's car value appraisal tool allows you to compare your car's value with other KBB values. Your insurer will pay you for the total value of the car or more accurately, pay you what you claim it is worth.
