Question by yoyo: When my car insurance “totals” my car and pays the value, which value are they using?
I was involved in an accident and the damage is pretty severe. The insurance will most likely “total” it and give me a check for the value. I know they use their own system, but when im using kelly blue book, which value should i look at, retail value, private party value, or trade in value, to get a general idea of how much the insurance will pay
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Depending on who they are they’ll give you even up to 25% LESS of market value till you show some claws… this in the way of photos to show your car was immaculate, service bills to show how mechanically pristine it was, photocopies of local ads to show how expensive it’ll be to replace your car and similar expedients.
An the more formal you can be the better. Ideally a lawyer to write a letter or two, contesting their cheap offer.
Insurance companies usually keep their own database and will not pay more than the value in it.
When a car I was driving was totalled in an accident, the other party’s insurance offered less than KBB wholesale value. I told my lawyer I’d agree to settle out of court if they’d raise it by $ 500 and they agreed to do it. But they had to make it appear as part of my medical settlement instead because like I said they couldn’t pay more than what they had in their database.
I don’t know what their database is based on, but most likely the Black Book (no relations to Blue Book).
KBB retail is not a good indicator of how much you should get. If you look at the fine print on the bottom of KBB’s website you’ll see that the retail price is the “starting point for negotiation and actual selling price will be less.” NADA is much more accurate, it’s based off of actual retail sales prices. That means what the car was actually purchased for.
Most insurance companies use NADA retail value. It’s a little less than KBB retail and a little more than KBB private party. NADA retail is an extremely fair value. Frankly, it’s a lot more money than your car would be worth if you put a for sale sign on it right before the accident. And remember, that’s basically what’s happening, you’re selling the car to the insurance company, they owe you market value for the condition the car was in right before the accident. So, remember that can of paint that spilled all over the passenger seat six months ago? Expect them to make a deduction for that damage.
The other option that some insurance companies use is called a market survey, In a market survey they look for ads for cars that are similar to yours that are for sale right now. They take an average and pay you that. That’s usually substantially less than NADA retail so cross your fingers that they don’t use this method. If they do go that route make sure you review the figures they use and actually make them show you the ads for the cars they chose as comps (comparables.) You’ll find that you’ll need to argue over features and condition for the vehicles they choose to get what you deserve if they use a market survey.
Don’t forget to get credit for anything you’ve added to the car. Maintenance items, like new tires, don’t add any value. The car should have tires on it. In fact, if the tires are all bald, expect a deduction for poor condition. But if you just put in a new DVD player, they’ll owe you something for that so don’t forget it.
What you need to understand is that you need to be compensated enough to REPLACE the car that was totaled. So you need to using the retail value in KBB as the amount of money you should be settling for.
Do your research and look for cars in your area and see what they are selling for. Use examples of real cars being sold to back up your claim. The insurance company will do everything they can to cut you a check for the least amount of money possible. You have to be active, intelligent and informed to get what you deserve.
This will be a fight but with the right documentation you should get a fair settlement.
NADA book which bank uses and will give value based on miles, whether it had comp. owhat ever a Dealer would buy car for themselves at. NADA is standard in fair condition.
the first answer was correct so here is some other things to keep in mind, are you able to prove that the car was in excellent shape? like all the maintenance records? if so you can get a better return, Where you hurt? do not sing off for a few weeks to make sure you do not have any medical problems after you settle. Good Luck
The insurance company usually provides you with what they consider you will have to spend to replace your car with a comparable car. So, if your car would cost you $ 5000 to buy the same make/model/year used, the insurance company will give you that amount.
retail plus sales taxes minus your deductible