When you are involved in an automobile accident that causes serious damage to the car, the adjuster must determine if it will cost the insurance company more to repair the car or pay you the “actual cash value” of the vehicle. This is a common practice, but your car’s actual cash value is never what you expect it to be.

Why Doesn’t the Insurance Company Just Cover the Expenses or Replace the Car?

Insurance companies are necessary. They are the lifeline for the average person who doesn’t have extra money to spend on repairs or medical costs. However, make no mistake about it, insurance companies are strictly businesses. Their objective is to make money and avoid unnecessary costs.

Most of us pay our premiums and rarely need to file a claim. In some cases, people go for decades without filing a claim. Minor repairs often cost less than our deductible. Even if the vehicle is expensive to fix, we would rather pay to have the car repaired, than chance our good record with the insurance company. We do not want our insurance to go up in cost.

In the event of an accident that requires you to rely on your insurance company, their job is to pay as little as possible. They do not want to pay more than they are required to, so you must to protect yourself before an accident occurs.

Actual Cash Value Explained

Many things can lower the cash value of your car after an accident.

  • Driving it off the lot
    • Your car is considered “used” from the moment you drive it off the car lot. The moment you exit the dealership, it loses value. Sometimes, it loses as much as 30% when it leaves the lot.
  • Mileage
    • The less cash value a car has, the more miles you put on your vehicle.
  • Maintenance
    • Following the manufacturer’s instructions for car maintenance (with receipts as proof) will affect the value of the car. Keeping up with oil changes, tire rotations, brake inspections, and other maintenance determines the class of condition of your vehicle.
  • Manufacturers recall
    • If you happen to have a vehicle that has had manufacturers recalls it can lower the cash value of your car.

Can You Fight It?

There are ways to get the actual cash value increased, but it takes effort. A car accident lawyer can also help you. Here are a few tips.

  • Keep receipts of any additions you added to the car that improved the value.
  • Keep all maintenance receipts to prove the car was well cared for, and repairs were fixed.
  • Check the paperwork for errors.
    • This would include dents listed that are not there, broken mirrors, major scratches, and other details added to make the car appear less than pristine
    • If needed, take pictures of the tire tread (use the penny method)
  • Shop around and gather ads from places like Craigslist and other classified ads, and print them off showing the price of the same car.
  • Look up the value in the Kelley Blue Book and make sure the choice of your value equals your car’s actual value.

Remember, you have a right to question your insurance company and request a review if you are not happy with the settlement offer. Fighting their decisions is okay.After all, they are paid by you!

If you have been involved in a car accident, contact a car accident attorney today to discuss your case.