When your vehicle is declared a total loss, the amount you receive depends heavily on how the insurance company calculates its value.
The most common method used by insurers. ACV is the vehicle's pre-loss value minus depreciation. It is not the same as what it would cost to replace the vehicle with a comparable one today.
This is generally what a dealer would sell a similar vehicle for. Insurers often use valuation services (CCC, Mitchell, NADA) that can produce values lower than true retail market prices.
The cost to replace your vehicle with a new or comparable one. This is rarely what standard policies pay on older vehicles. Some newer or special policies may offer replacement cost coverage.
Insurance companies have a financial incentive to keep valuations low. Common issues include:
Understanding these valuation methods is critical when negotiating a total loss settlement. An experienced advocate can identify when an insurer's offer falls short and help build a stronger case for a higher payout.