We receive many calls a day, from folks needing help with an insurance accident claim that may have been or may not have been at fault in. Typically if your in an insurance accident, the at fault party is responsible for reimbursing you for all your losses associated with the accident. If the accident was severe enough, your car may be deemed not repairable and needs to be replaced. In this case you are entitled the Actual Cash Value (ACV) of your vehicle prior to the loss.
Actual Cash Value (ACV) refers to the value of a damaged vehicle, or a vehicle trade in. There is no absolute method to determining the ACV, but in order to determine the ACV, you must take into account the following; Value Guide Data, Fair Market Value and the Replacement Cost.
Value Guide data is a good resource to determine roughly what you car is worth by orders of magnitude to get a ball park number, but doesn’t account for regional adjustments, aftermarket equipment or above or below average mileage.
Fair Market Value can be determined by looking at local market comparable vehicles sales and asking prices, combined with value guide data this gets you closer to what you lost, but what if you car was rare or there are no other vehicles like it in the local market.
Replacement Cost if the car is new and similar vehicles are available is easy to determine if the car is new, but it can be difficult to estimate a value adjustment for things like limited edition, celebrity signed or endorsed vehicles or a numbered rare vehicle from a specific builder.
You can calculate your own ACV by doing some research and having the gut feeling your car is worth more than is being offered, but buried within most insurance policies there are requirements for you to hire a certified appraiser to determine the ACV of your vehicle.
In the event you car is a total loss, the insurance company is required by law to reimburse you in an amount that is equal to the fair market value of your auto. Don’t let them tell you what your car is worth, have your car appraised and have someone who’d not trying to save the insurance company some money.
Replacement cost is the dollar amount needed to replace a damaged item with one of similar kind and quality without deducting for depreciation. Actual Cash Value is the amount needed to replace the item at the current market value including depreciation.
Protect your investment. Have it appraised!!!