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Is your vehicle a total loss?

 There is a lot of talk in the collision repair industry about the rising number of vehicles being declared a “total loss” by the insurance companies. While most consumers’ aren’t concerned with the rising number of total losses, you may have concerns about the value the insurance company is placing on your vehicle in the event it’s beyond repair.

You may be able to increase your settlement offers on the loss if you are at least somewhat familiar with the process insurers are required use to determine the value of your car. We’ll highlight some key points.

Massachusetts Regulations spell out exactly how insurers are to determine the value of a vehicle. It’s a methodology that is transparent, is fair to the vehicle owner and insurer, and most importantly, it’s mandatory.

While the regulation states that values shall be based on ALL the factors outlined, some carry more weight than others depending on the situation.

133.05: Determination of Values
(1) Actual Cash Value: Whenever the appraised cost of repair plus the probable salvage value may be reasonably expected to exceed the actual cash value of the vehicle, the insurer shall determine the vehicle's actual cash value. This determination shall be based on a consideration of all the following factors:
(a) the retail book value for a motor vehicle of like kind and quality, but for the damage incurred
Retail book values are easy to obtain. Get values online, or at the local library. Banks and car dealers have the guides too. Be sure you know the optional equipment, mileage and understand the condition guidelines

(b) the price paid for the vehicle plus the value of prior improvements to the motor vehicle at the time of the accident, less appropriate depreciation;
“price paid” is one factor that is important with recently acquired vehicles. Obviously, if you inherited the vehicle from your grandmother, this factor wouldn’t carry much weight. The second part of that line also refers to “the value of prior improvements”. Value of improvements can included things like your extended service contract, paint protector decals, wind and rain shields, mud guards, new tires, service history and any and all improvements. 
(c) the decrease in value of the motor vehicle resulting from prior unrelated damage which is detected by the appraiser;
Making deductions for any un-related damage the vehicle may have is reasonable. What’s not reasonable is the dollar value some insurers place on the prior damage.
(d) the actual cost of purchase of an available motor vehicle of like kind and quality but for the damage sustained.
 Finding comparable vehicles for sale is easy with the internet. Be sure to compare apples to apples, and make adjustments for mileage, options and improvements.

Caution: Many insurance companies use the services of data providers such as CCC, Mitchell and Autatex. All three companies have programs to provide values to the insurer. They go by the name of Valuescope, Total Logic, and Auto Source.  These programs are designed to save the insurer money. They depend on information (condition, improvements) provided by the insurer, which often times is inaccurate.

Best Practice: Don’t hesitate to ask the insurer about its methodology in determining your cars value. If it doesn’t follow the MA regulation above, reject it as non-compliant with MA regulations. Do you research and be prepared. All correspondences should be in writing.