| People who get in car accidents often wonder just | | | | appraiser is concerned with determining the actual |
| how an insurance company makes the decision to | | | | cash value of the car. This figure, known as the |
| repair a vehicle. Sometimes, the damage renders | | | | ACV, is determined in a variety of ways by the |
| repairs futile. | | | | appraiser. Comparisons are made with similar cars |
| An automobile is declared to be a total loss when the | | | | being sold in the area at the same time. There is |
| cost of replacing it is less than the cost of fixing it. | | | | computer software available that can assist in this |
| Of course, there are extremes that go beyond this | | | | determination as well. |
| definition. It is possible for an automobile to become | | | | Some insurance companies will declare the car totaled |
| so destroyed that fixing it is not even an option. | | | | if the repairs are as low as 51% of the ACV. Other |
| Obviously, it is then a total loss except for the | | | | companies use a figure closer to 80%. There are |
| salvage value of the metal. In normal circumstances, | | | | incidental expenses that include storage, rental of |
| the damage could be repaired, but the cost of doing | | | | replacement vehicles, and salvage costs. It is these |
| so might make this impractical. | | | | incidental expenses that cause the insurance |
| There are three different people involved in this | | | | company to declare the vehicle totaled at such a low |
| determination of total loss, and each of them has a | | | | repair cost to ACV ratio. The formula could be stated |
| vastly different agenda. The car owner is motivated | | | | that the car will be declared a total loss if the repair |
| by his emotional attachment to the car. He is thinking | | | | cost plus the incidental expenses equals or exceeds |
| of how satisfied he was with it, and trying to | | | | the actual cash value. |
| determine if a new one might be better. | | | | Actual cash value will take into consideration prior |
| Unfortunately, if he is depending on his insurance, this | | | | damage and neglect on a vehicle. The owner is going |
| decision is not going to be his to make anyway. The | | | | to often find he disagrees on the ACV, or possibly |
| second party concerned is the auto body shop. They | | | | the repair cost figures. It is a good idea to get a |
| are going to be more interested in attempting to fix | | | | damage estimate of your own from an auto body |
| the auto. This is what they are in business to do. | | | | shop you trust. This will have to be at your own |
| The important person in the decision making process | | | | expense. You might also want to do a little research |
| is the insurance company appraiser. Each insurance | | | | into actual cash value. You do have recourses open in |
| company has its own set of internal criteria for | | | | most cases. Despite this the answer to the topic |
| determining total loss. There are no standard tables | | | | question is simply this: a car is totaled when the |
| or formulas that are used by everyone. The | | | | insurance company says it is totaled. |