How Do Insurance Companies Determine Car Value?
If you are in an accident where your car is totaled, your insurance company will compensate you handsomely. They will most likely cover the expense of buying you another car. How they decide on the actual cash value remains one of their secret ingredients. However, if you are not satisfied with the valuation you can always dispute their offer. An expert can help determine car value for insurance claims Oklahoma City.
Most insurance will rather pay out the actual cash value of a totaled car. This means you will be paid your car’s market worth before it got totaled.
What is Actual Cash Value?
The actual cash value is what your insurance company will pay for your car after it is totaled in an accident or stolen. In other words, ACV is the value of your vehicle before the collision. This value is usually determined by the insurance company
Since your insurance company will factor in your vehicle’s accident history, age, wear, and tear, the actual cash value your insurer will offer may be several hundreds of dollars below your expectation. Even if you did everything possible to keep your car in pristine condition, cars depreciate as soon as you take them off the car lot. Your insurer will factor in depreciation while calculating the actual cash value.
Even if you recently bought your car being a few weeks old with barely any mileage when it was written off by the accident, the actual cash value will still be lower than what you paid, on the basis that the car has depreciated. As a result, some drivers choose to include additional coverage options like gap insurance and new car replacement coverage. With this additional coverage, you will be paid more than the actual cash value
How Do Insurance Companies Determine Car Value
Most insurance companies have their own unique formula to determine a car’s value. As a result, it can be difficult to predict how your car insurance calculates the actual value of your car. But as earlier mentioned, if you feel the offer doesn’t meet up to your car’s worth, you can always dispute the offer.
It is hard to predict how much your insurance company will offer when determining car value for insurance claims Oklahoma City. To arrive at a value, your insurer will take into account many factors including accident history, car’s age, mileage, wear and tear, modifications, and any past claims you’ve made.
Also, they will also conduct market research to determine the worth of similar vehicles in your area. They will go for the same make and model. This will give them an idea of how much your car’s worth in the current market before it was stolen or totaled.
Luckily, your insurance company may exceed your expectation by paying what the exact amount you expected. If otherwise, you can reject the offer and negotiate. Be prepared to provide evidence to back up your claim. To get the most out of your car insurance claims, leave it to the experts.