Will I be Reimbursed For My Car’s Full Value?

Legally, your insurer is obliged to pay you full value for your vehicle should it be damaged beyond repair – assuming that you have full coverage and not just liability insurance. The amount of the settlement should enable you to purchase an identical vehicle. This is what the word indemnity means: restoration of one’s status to that enjoyed before the loss occurred.

That’s the theory. In practice however, this is not always the case. If you leave it up to your insurance company, chances are that you will not receive full compensation for the damaged vehicle, unless you do some due diligence of your own and provide some documentation.

Why is the Burden of Proof on Me?

It’s not – totally. However, your insurer is probably not going to do all the research when it comes to estimating your vehicle’s true value, because there are numerous factors that determine this. Furthermore, very few insurers go by NADA or the Kelley Blue Book when determining compensation for a damaged vehicle. Generally, insurance companies have their own criteria. They may also make determinations by consulting various car dealers.

Other factors that can determine the compensation value for a vehicle may include:

• mileage
• condition at the time of the accident
• maintenance and repair history
• age of the vehicle

As you can see, making such a determination is far from simple.

What Should I Do to get Maximum Value?
First of all, it pays to keep a detailed history of the vehicle, showing all maintenance and repairs that was carried out. This should include receipts for all services performed.

Secondly, if you live in any state other than Alaska, Delaware, Montana, New Hampshire or Oregon, make certain that your insurer includes sales tax in any settlement agreed upon. Not all insurers do this automatically, and it is contingent upon you to address this issue.

What About Classic Vehicles?
Typically, a classic or antique vehicle is not driven daily, but there is always a possibility that such a vehicle may be damaged beyond repair in an accident. First of all, you should carry a special “classic car” policy on such a vehicle. Secondly, you should document all restoration costs and have the vehicle professionally appraised by a third party.

What if my Car is Salvageable?
Even if your car can be repaired, it will still lose value. In addition to compensation for repairs, you may be entitled to what is called diminished value compensation. This means you receive payment equivalent to the difference between the price you might have gotten for your car had it not been damaged and its current value. Not all insurers offer this kind of coverage however; it pays to shop around and ask your insurer if this type of coverage is available prior to signing up for the policy.