After a car accident, when dealing with a car accident claim a number of terms may be used that you may not readily recognize or understand. One such term is actual cash value; this article will discuss what actual cash value means in respect of a car accident claim.
According to Investopedia [Actual Cash Value Definition (investopedia.com)] actual cash value is “the amount equal to the replacement cost minus depreciation of a damaged or stolen property at the time of the loss. The actual value of which the property could be sold, which is always less than what it would cost to replace it.” After being involved in a car accident you will likely put forward a personal injury claim or damages claim in respect of any damage to your vehicle. It is most likely that you will hear your insurance adjuster use the phrase “actual cash value”. For any legal advice or representation speak to a lawyer for personal property damage in auto accident today.
More often than not the phrase actual cash value is used when your vehicle is getting to what is designated a “total loss”. As noted from the definition the actual cash value is the real value of your vehicle for its replacement after taking into consideration its depreciation. When the amount you require to fix your vehicle is more than the vehicle’s actual cash value, then your insurer will come to the conclusion that it is a total loss. When this is the case rather than paying for your vehicle to be repaired the insurer will likely pay for you to replace your vehicle. Often this occurs when you are making a claim for compensation under your own collision coverage or in respect of a third party liability claim with the other driver’s insurance company.
That being said different people have different takes on the replacement value and the actual cash value of a vehicle. However, the most common way to determine your vehicle’s replacement value and actual cash value is based on examining the sale price of the same or almost the same vehicle; that is similar vehicle model, year, make, condition and options. This should be in the same geographical area as yourself. One of the most common valuation resources used is the Kelley Blue Book.
It is not uncommon for a vehicle owner to disagree with the valuation made by the insurance company about the vehicle. When an individual disagrees with the insurance company it basically means they either
· do not think that the vehicle had to be designated as a total loss but rather should be fixed by the insurer, or
· agree that their vehicle is a total loss but are of the opinion that the insurance company ought to pay more in order to replace it
Before taking drastic measures do the following:
· Ask the insurance adjuster for the method they used to arrive at the actual cash value amount
· Ensure that the insurance adjuster has taken into consideration any extra features or equipment that are on the vehicle
· Do some research - look online for ads for a similar make, model and year of your vehicle and their asking price. If higher bring them to the adjuster’s attention.
Resource Box: For a personal injury attorney in Alaska, the author recommends the Crowson Law Group.
