Thursday, 1 October 2015

How Can Insurance Providers Determine Vehicle Value

How Car Insurance Companies Use Value

Car insurance companies arrange cause of a automobile's expenditure before and after the vehicle is in an accident. The owner's insurance rates are directly related to the machine's bill, as higher-value cars Testament demand a larger payout on the tool of the insurance convention provided the vehicle is in an accident. The exceeding the machine is bill, the higher the premiums. Whether a vehivle is in an accident, its amount Testament be calculated again to cinch how even the insurance partnership Testament posses to invest in repair bullwork. Other costs, such as taxes and registration fees, may also be included in or deducted from the ACV, depending on the insurance agency making the calculation.


While a car's actual cash value is generally determined in-house by the insurance company, a third-party appraisal company is often brought in for consultation when trying to determine the value of a car after an accident. The difference in value between the appraisal company and the ACV that was calculated by the insurance company is often used to determine the cost of the damage to the vehicle and may be used to set limits on how much the insurance company is willing to shop for repairs.

Determining ACV

A car's ACV is based on several factors. Price surveys from dealers who sell similar car models, industry guides such as the Kelley Blue Book and the prices that similar cars have sold for online and in non-dealer sales are all used by insurance companies to figure a vehicle's ACV. Provided the complete reward of repairing the machine is higher than the machine's appraisal, the insurance gathering imaginable will pay the owner the value of the car and declare the vehicle a total loss.

Actual Cash Value

The actual cash value, or ACV, refers to the amount the car would be worth if it were sold in its current condition. ACV is used as a base line in determining the value of a car for insurance purposes, though not all calculations will coincide with the vehicle's ACV.