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Auto Insurance Claims/Fair Market Value of totaled vehicle

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Expert: - 1/17/2012


Question
QUESTION: My car was parked in front of my home, and a flatbed box truck that transports portable potties slid on the ice and side swiped my car. The damage is from the middle of the back quarter panel to just in front of my side mirror on the drivers side. I have a 1992 Ford Tempo GL. Upon talking to the drivers insurance company, I was informed that they will most likely total the vehicle due to not being able to find parts for it anymore.
How do they find the FMV of my vehicle, and should the settlement be enough to replace my vehicle with a comparable vehicle?
Also, what would be considered a comparable vehicle?

ANSWER: They owe you the actual cash value prior to the accident.  This is the amount you could have sold the vehicle for prior to the accident.  Some insurers use book value, like NADA or Kelly Blue Book.  Others use a vendor like CCC to give them a value.  You should check Edmunds, Kelly, and NADA on line to get a rough idea of the value.  Also check want ads for similar vehicles.  Keep in mind that want ads are usually listed higher than the amount they actually sell for.  There will be somre variation aong all these sources, so a fair amount is somewhere in the middle.  Also, you mus consider the condition of the vehicle.

A comparable vehicle is not relevant.

---------- FOLLOW-UP ----------

QUESTION: so the actual cash value, based on my findings from the above listed, place it in the $300-500 range. I can not replace my vehicle with that amount. What is my recourse if that is the offer from the insurance company?

Answer
Unfortunately the law states they owe the ACV, and replacing a vehicle is not relevant.  I understand your frustration but this is the law in all states.  However, if the vehicle is driveable, you can retain it, and use whatever cash they give you to make it roadworthy.

Auto Insurance Claims

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Claims Guy

Expertise

I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer......I can answer questions related to any aspect of Automobile insurance claims and coverages. I can provide an inside look at how insurers operate. I always treat my customers fairly and want to help make sure you are treated fairly. However, please keep in mind that being treated fairly according to the law does not guarantee that you will get what you want. I can also answer some questions regarding Homeowner's and other types of insurance claims. I have handled all types of auto insurance claims and coverages. I am NOT an automotive repair expert but can give advice re how insurers handle complex repair issues. Please keep in mind that every state has its own set of laws pertaining to rules of the road, liability, and insurance. No one is an expert on every state. I am most familiar with laws in Maryland, DC, West Virginia, and Virginia, but will attempt to answer questions for other states. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.

Experience

I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.

Organizations
CPCU Society. Adjusters license in multiple states. International Association of Specal Investigators

Education/Credentials
I have a B.S. in Finance and have completed the AIC and CPCU designations.

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