How is the actual cash value of your vehicle determined?

If my car is a total loss, how does my car insurance calculate the value of my vehicle?

Answer
“To determine the actual cash value of your vehicle, car insurance companies look at the cost of your vehicle and its age. Actual cash value is the value of your vehicle minus depreciation.
For example, if your vehicle was worth $20,000 when you first purchased it and has depreciated by 20%, the actual cash value is $16,000. This would be the amount your car insurance would pay out if it’s marked a total loss. However, car insurance companies use internal databases and software to determine this value, unlike the value you might find if you conducted your own research.
However, to get an idea of your vehicle’s value, you can look at sites like Kelley Blue Book or Edmunds. They will allow you to input your vehicle’s details to get an estimation of its value. This should be similar to what you would be paid out if your vehicle is marked a total loss.
If you have a more expensive vehicle, you should make sure that you have the proper coverage to protect yourself from a total loss. Use the Jerry app to compare dozens of quotes from top insurers and get the coverage you need at the best price possible.”
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Emily Maracle
Answered on Sep 10, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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