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How are the value of my car and the cost of repair determined?
There are several
standard guidelines for determining the value of your car for insurance
purposes. You and your insurer can refer to one of the books that list
the depreciated value of all new and used cars. One of these books is
published by the National
Association of Automobile Dealers another is published by Kelley
Blue Book.
When you file your claim, your insurance company will refer you to a
claims adjuster. The adjuster will verify the loss and determine what
it will cost to repair the car. The adjuster’s estimate can serve as a
benchmark to which to compare your own mechanic’s estimate.
No good adjuster or insurance company will expect you to sign an
agreement accepting the insurer’s estimate as the total claim payment
until you’ve established, to your own satisfaction, that it will cover
the cost of repair. The insurer will expect you to get your own
estimate from your mechanic, garage or car dealer. Don’t allow yourself
to feel pressured into accepting the insurer’s estimate of repair costs
without getting at least one estimate of your own.
Your insurance company can’t require you to have repairs done at a
particular shop. But they can insist that you get more than one
estimate for the work to be done on your car. Just as you want to make
sure that your car is adequately repaired, the insurer wants to make
sure it doesn’t pay a grossly inflated repair bill.
Don’t be surprised if your insurance company opts to pay for the lowest
bid. You don’t have to accept that bid if you believe the low bid won’t
adequately repair your car. Don’t hesitate to argue with the adjuster
if you really believe his repair estimate is too low based on what your
mechanic has told you.
One factor that could reduce the amount of your claim for a repair job
is what insurance companies call betterment. If your old car is
repaired with brand-new parts, your insurer may argue that the repairs
have actually enhanced the car’s value and therefore they can
legitimately reduce your claim by the difference between a used part
and a new one.
It is up to your insurer to decide whether to pay for repairing your
car or to declare it a total loss and pay you its book value. Most
standard auto policies will not pay to repair a vehicle if the repairs
cost more than the cash value assigned to the car. There won’t be any
dispute about whether to repair the car if it was completely totaled.
But you may argue about what the pieces of the car were worth when they
were assembled as a car. For you to get a settlement higher than the
book value of your car’s make and model, you will have to submit
evidence such as mileage records, service history and affidavits from
mechanics to show that your car was worth more. You’re entitled to the
market price of the car you just lost. You shouldn’t get more or less
than what you are due. |
© Insurance Information Institute, Inc. - ALL
RIGHTS RESERVED -
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