how does insurance co determine value when totaled

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Apr 7, 2004
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Location
NJ
My daughter was involved in an accident which both airbags deployed. Thankfully all involved are ok. Insurance co said car would probably be totaled due to airbag deployment. How would they determine value is it KBB or some other method. Car is a 2012 jetta SE with 67k miles on it. Also is value retail, wholesale ,private party. Also do you get value + tax for some reason I thought that was the case. Agent said they do 5 comparables sometimes...would I get to see what they are comparing. Car is an se with sunroof connectivity and nicely equipped. I wouldnt want them looking at Jetta S which are stripped down. I am trying to get her back in same kind of car.
 
It's probably KBB retail the condition it was in just before the crash. Sometimes they look for ads of similar cars for sale in your area and take the average. It varies by state and by insurance company.

If you have GAP insurance, then it covers how much you owe on the car if the valuation is less than what you owe on the car.
 
Some years back I totaled one of my Harleys. They offered me $11k I laughed at them. They told me to get some comps for my area. I provided 6 comps. They ended up paying me over $16k.
 
It is good to remember that insurance companies are expert at what they do. That is, making a profit.

They came by with a check in the $3000 range for the damage to our truck. Actual bill, about $10K. Accept the check and repair it yourself the agent said.

Any trick to avoid making you whole.

Go out and price an exact replacement, equivalent shape in every way, including tax, title, registration fees, dealer fees and so on. If insurance does not meet this requirement, minus your deductible, you are not being made whole.
 
They’ve got their own tools, not sure how they do it.

My Camry was totaled 2 years ago. I was prepared with KBB and NADA guides printouts for the value of the car, which had over 200k miles and was 16 years old. The insurance company gave me $3,450 for it (a lot more than my printouts). I paid $2,100 for it... they said if it didn’t have a few dings and faded paint it would have been worth $3,950... I bought it back for $868.

So I think it’s usually somewhat fair.
 
Most will total when you hit repair costs that exceed 75% of retail value.
 
The insurance company told me they get comparison values of the vehicle for sale in your area.
They gave me a fair price but when they actually compared the options my vehicle had they decided to repair the vehicle in lieu of totalling it.
The garage provided alot of false information which upset me and made me trust insurance companies even less when the investigation just turned out that they got in bed with the dealership.
Basically your dealing with the Devil.
 
My mom totaled her Camry and got a hefty check for it. A lot more than I thought she would.

I totaled my Accord years ago and it took about a month of negotiations to get what I wanted.

Sometimes the insurance company is fair and sometimes they figure you're desperate for a check so you can buy another car and low ball you.
 
My insurance company does the 3-4 comparable vehicles, lists every option on the car and values it in, mileage premium (if any), sales tax, etc. When they missed the CD player because they couldn't find it (it was in the console) they added that in. The value was very fair at $4405 such that I could go out and find a comparable car from a private party for 65-75% of that cost. I wasn't going to argue. And if I was trying to sell my car....no way I could get $4400. Try more like $3000-$3500 tops....if I was lucky. KBB average trade in value on that car in good condition was $1500.
 
Originally Posted By: Cujet
It is good to remember that insurance companies are expert at what they do. That is, making a profit.

They came by with a check in the $3000 range for the damage to our truck. Actual bill, about $10K. Accept the check and repair it yourself the agent said.

Any trick to avoid making you whole.

Go out and price an exact replacement, equivalent shape in every way, including tax, title, registration fees, dealer fees and so on. If insurance does not meet this requirement, minus your deductible, you are not being made whole.


Right. The key word here is made whole. If the insurance company low balls you, just say that you're not being made whole and to find you an equivalent car that you can buy with the money that they offer. When they come up with examples, you can point out how it's not the same as your car, they probably won't quote a lower trim line but they may point out one that doesn't have an option your car does. Usually they give you retail which should be enough to buy a similar one if you bought it cheap enough.
 
I've worked for three different insurance companies, they all do it differently. Bottom line, complain to high heaven if they don't, and don't give up! They will cave eventually...
 
If you don't like the price they give you, find several comparable vehicles for sale yourself in your area. Print the ads and send them in. They can't argue with actual evidence. KBB is a good starting point but rarely do vehicles actually sell for the prices listed.
 
My experience was with NJM Ins. Co. They used autotrader.com. Search for the exact model and options. I found about 5 cars similar to mine. I threw out the high and low priced ones and took the avg of the three. I submitted that to them and they paid it plus sales tax, and all fees.
 
I had an older vehicle that was totaled due to water ingestion in the engine. The amount they gave me was well north of what I could have sold it for on the open market. It had to have been a book value for cars that were in much better shape than what I drove.
 
Ok first the total loss threshold is determined using 2 criteria. A) state law. Some states dictate that a vehicle must be totaled once repairs meet an established percentage of the vehicle's ACV or Actual Cash Value (not kbb etc) some stated allow the insurance company to back out airbag replacement when calculating repairability, backing out paint and materials etc. Also there are guidelines in each state for flood vehicles, recovered thefts and burns. B) the insurance company sets the threshold, each company thru its actuarial process determines what the threshold will be, Progressive, State Farm,Geico etc all have their own guidelines for their appraisers. How the value is determined is stated in the policy jacket. Ok now on to valuation, each estimation software company aside from their estimatics has a TL valuation. This valuation is a complex algorithm based on a ton of factors. The appraiser (not the adjuster) fills out a total loss valuation based on the VIN which is decoded with some vehicle options (except pick up trucks) mileage is added then the vehicle is conditioned. There are guidelines for each conditioning of the interior (which is broken down to subsections: dash, seats carpet headliner etc) exterior and general mechanical. The data is sent electronically to the Software company and they generate a Total Loss Vehicle Valuation Report which describes in detail how the value is determined. Now there are 2 SIGNIFICANT things one needs to consider first and foremost are you a claimant or an insured? The reason for this is that the Insurance company has a legal contractual obligation with an insured therefore you have more negotiating "pull" if you're an insured they must also consider what type of policy you have ( replacement value policy ACV policy etc) , if you are a claimant well the insurance company really only has to follow state law. Also remember that ACV is very different than what KBB or NADA state, I don't have enough room to list those but check out KBB or NADA's websites and they have disclaimers noting the difference.
 
Originally Posted By: Gimpy1
Ok first the total loss threshold is determined using 2 criteria. A) state law. Some states dictate that a vehicle must be totaled once repairs meet an established percentage of the vehicle's ACV or Actual Cash Value (not kbb etc) some stated allow the insurance company to back out airbag replacement when calculating repairability, backing out paint and materials etc. Also there are guidelines in each state for flood vehicles, recovered thefts and burns. B) the insurance company sets the threshold, each company thru its actuarial process determines what the threshold will be, Progressive, State Farm,Geico etc all have their own guidelines for their appraisers. How the value is determined is stated in the policy jacket. Ok now on to valuation, each estimation software company aside from their estimatics has a TL valuation. This valuation is a complex algorithm based on a ton of factors. The appraiser (not the adjuster) fills out a total loss valuation based on the VIN which is decoded with some vehicle options (except pick up trucks) mileage is added then the vehicle is conditioned. There are guidelines for each conditioning of the interior (which is broken down to subsections: dash, seats carpet headliner etc) exterior and general mechanical. The data is sent electronically to the Software company and they generate a Total Loss Vehicle Valuation Report which describes in detail how the value is determined. Now there are 2 SIGNIFICANT things one needs to consider first and foremost are you a claimant or an insured? The reason for this is that the Insurance company has a legal contractual obligation with an insured therefore you have more negotiating "pull" if you're an insured they must also consider what type of policy you have ( replacement value policy ACV policy etc) , if you are a claimant well the insurance company really only has to follow state law. Also remember that ACV is very different than what KBB or NADA state, I don't have enough room to list those but check out KBB or NADA's websites and they have disclaimers noting the difference.


Some insurance companies will total the vehicle if there is flood damage. They just don't want to deal with ongoing electrical issues from the water damage. Some also put more weight for frame damage in considering if it's a total loss.
 
Originally Posted By: Leo99
Originally Posted By: Gimpy1
Ok first the total loss threshold is determined using 2 criteria. A) state law. Some states dictate that a vehicle must be totaled once repairs meet an established percentage of the vehicle's ACV or Actual Cash Value (not kbb etc) some stated allow the insurance company to back out airbag replacement when calculating repairability, backing out paint and materials etc. Also there are guidelines in each state for flood vehicles, recovered thefts and burns. B) the insurance company sets the threshold, each company thru its actuarial process determines what the threshold will be, Progressive, State Farm,Geico etc all have their own guidelines for their appraisers. How the value is determined is stated in the policy jacket. Ok now on to valuation, each estimation software company aside from their estimatics has a TL valuation. This valuation is a complex algorithm based on a ton of factors. The appraiser (not the adjuster) fills out a total loss valuation based on the VIN which is decoded with some vehicle options (except pick up trucks) mileage is added then the vehicle is conditioned. There are guidelines for each conditioning of the interior (which is broken down to subsections: dash, seats carpet headliner etc) exterior and general mechanical. The data is sent electronically to the Software company and they generate a Total Loss Vehicle Valuation Report which describes in detail how the value is determined. Now there are 2 SIGNIFICANT things one needs to consider first and foremost are you a claimant or an insured? The reason for this is that the Insurance company has a legal contractual obligation with an insured therefore you have more negotiating "pull" if you're an insured they must also consider what type of policy you have ( replacement value policy ACV policy etc) , if you are a claimant well the insurance company really only has to follow state law. Also remember that ACV is very different than what KBB or NADA state, I don't have enough room to list those but check out KBB or NADA's websites and they have disclaimers noting the difference.


Some insurance companies will total the vehicle if there is flood damage. They just don't want to deal with ongoing electrical issues from the water damage. Some also put more weight for frame damage in considering if it's a total loss.



Over on the truck sites Insurance companies have actually paid for a full frame replacment to avoid totaling a $70,000.00 pickup.
 
I also had to fight like crazy to get the insurance company to pony up the REAL value of my motorcycle in 2001.

I then bought it back from them... very, very cheap. It took 6 years for me to fix up again.
 
Bikes are a major PITA especially if they are highly customized or custom built bikes, it is also very difficult to find "comparable vehicles" If you have a highly customized, or rare vehicle or bike I highly recommend that you get a declared value policy in which the policy is written based on the declared value you present. That way in the event that the vehicle is a TL you get paid the value you declared, not ACV. The caveat is you sometimes have to go with a specialty carrier that offeres these policies.
 
99% of insurance companies automatically TL flood vehicles. I can't even begin to count the TL estimates that I wrote as one line "Flood Damage Obvious Total Loss" during CAT duty. Those vehicles also had special title branding to prevent titles getting "washed"
 
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