How Insurers Calculate the Value of a Totaled Vehicle

In serious auto accidents, sometimes the cost of repairing a vehicle is higher than the cost of replacing it. When this happens, auto insurers declare the vehicle a total loss. To settle a claim involving a total loss, the car insurance company must determine the value of the totaled vehicle in order to settle the policyholder’s claim. The amount of the settlement check the policyholder receives will be determined by how much the auto insurer figures the car is worth. Find out exactly how insurance adjusters determine the value of a totaled vehicle in what follows.

Computerized Databases

Nowadays, few insurers actually calculate the value of a totaled car; rather, they depend on sophisticated computer databases to provide them with an accurate figure. Some auto insurance companies have their own auto valuation databases, while others use third-party databases that contain information from across the country. Some insurers even share databases to determine a totaled vehicle’s value. These databases basically tell the insurance adjuster how much your vehicle would cost on the used market, or how much it would cost to replace.

Required Inputs

In order for the car insurer’s database to come up with an accurate figure, the adjuster will need to input the vehicle’s make, model, year, mileage, location, and pre-accident condition. All of these factors will influence how much the totaled car would cost to replace in your area. These variables are for the most part objective, with the exception of pre-accident condition. Once the adjuster has this information, he/she can either access the database directly or call the details in to the company to get a number. The car insurance company will then write you a check for the value of the totaled vehicle, and your claim will be settled.