How Do Insurance Companies Determine The Value Of My Vehicle After An Accident?

One of the biggest things that we recommend after an accident is to always keep in mind the insurance companies are not your friend. The agents and adjusters you speak to may be the kindest people in the world, but they have one job. That job is to protect the financial interests of the insurance company. Paying out claims is not in their best financial interest because it costs them money. So if you’ve been in an accident and have received a valuation for your vehicle that doesn’t seem right, don’t accept it.

Understanding Your Insurance Policy


The first thing to understand when you get a lowball vehicle offer is to understand what your policy actually covers. When it comes to vehicle damage there are three concepts that you need to understand:

• “Total Loss”: Total loss is a declaration from the insurance companies. If a vehicle is deemed a total loss it is because the cost of repairs is more than the value of the vehicle. Rather than paying for the costly repairs, they will offer you a value to replace the vehicle.

▪ Actual Cash Value (ACV): ACV is a term for what the vehicle is worth prior to the accident on the open market. To get this figure they factor in the age, mileage, vehicle features, and overall condition. Then they will look at a source like Kelley Blue Book to see what the market price of the vehicle is if it would have been sold the day before the accident. This value is often very low compared to what you paid for the vehicle and sometimes isn’t even enough to cover what’s left on the loan. However, this is the most standard insurance coverage and the value assigned to a total loss.

▪ Replacement Cost (RC): The RC, also called the “Replacement Value,” is a different type of coverage. This is a premium coverage, often an add-on to your insurance, that is designed to fully replace your vehicle. This amount will be whatever it costs to fully replace your vehicle. Unless you have this specific coverage, if your vehicle is a total loss, you will get the ACV. Most people do not have this coverage, so they are shocked when they receive a low settlement offer because the ACV is rarely enough to replace the vehicle.

▪ Another coverage that may come into play is Guaranteed Auto Protection (GAP). GAP coverage will pay the difference between the ACV and what you still owe on the vehicle loan or lease agreement. GAP, like RC, is an add-on coverage. What the insurance company offers is directly related to your policy coverages, but beyond that, they will still try to lowball you.

What To Do If You’ve Been Lowballed By The Insurance Company


▪ You do not have to accept the insurance company’s offer. If you feel they are lowballing you for the value of your vehicle, you can dispute their offer. For example, if you had an expensive stereo system installed, you can present receipts. If they offer lower than Kelley Blue Book value, you can also dispute it with proof of the market value. This is a very challenging and frustrating process. However, if you are working with an auto accident attorney, they can help. They’ll review your policy to truly understand your coverages. Then they will provide all the evidence of the true value of the vehicle and will negotiate and fight for a fair settlement.

▪ If you believe the insurance companies are lowballing you on your vehicle value or any of your other damages like your injuries or lost wages, speak to the attorneys at Goldman, Babboni, Fernandez, and Walsh. For decades, we’ve been protecting our clients from lowball offers from the insurance companies and we can protect you. Give us a call at 1-833-954-1234 for a free case evaluation and to learn more about how we can help.

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Attorney David Goldman has been exceptional in the process of helping me through the case. He has always been easy to reach, whether by phone or email, and has thorough knowledge and explains clearly in depth so you feel safe and confident in your lawyer

I used Michael Babboni and his paralegal, Nicole Moore for a legal matter. They went above and beyond my expectations. During the entire process there was constant communication with both Michael and Nicole. They were extremely organized and on top of my case, which I am very grateful for. Michael truly had my best interests at heart and he was very genuine. I plan on referring Michael to all family and friends and will continue to use him in the future.

I dealt most with Mr. Fernandez. I didn’t know a lot about this process. He took the time to speak with me individually, in person, to explain everything. It was very helpful to actually know and understand the process and what to expect. He closed my case quickly, which was nice that it was not prolonged! I appreciated his hard work and getting me what I felt I deserved after my car accident. I highly recommend him to anyone who needs an honest and reliable lawyer to assist you with your case!

I hired Mr. Walsh after an automobile accident this past March. He and his entire staff were extremely professional. They kept me informed every step of the way and settled my case in a timely manner. Thank you so much for your help.

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