An accident or a situation that causes damage to your car that is covered by your insurance policy can seem complicated, but the insurance company will usually have a set method of determining the value of the vehicle. Although there may be some room for negotiation if you feel that the amount is too low based on the current cost of the car, you should take time to research the possible value before determining that it is not appropriate or fair.
Cost of the Car
A key factor that your insurance provider will consider is the current cost of the car. The market value can change over time, so the cost of the vehicle can be a starting point.
This is generally true when the vehicle is still relatively new, such as a car that you purchased a month or two in the past. The insurer may use the current price and then calculate the depreciation rates based on the vehicle and the situation to determine a fair amount after determining that the car is a total loss.
In the case of cars that are older and have been on the market long enough to determine the cost based on the market value, the insurer may use a guide to determine the fair market value of the car.
Depreciation rates can vary based on several factors, including re-sale value. Guides provide information regarding the current market value, which is then used to determine the value of the car. The current market value may be less than that price that you paid to purchase the vehicle.
Determining the value of your car can be complicated, but there are ways to evaluate the amount that you can expect. To learn more, contact us to talk to an agent today.