What do insurance companies base their payouts on for cars that have been totaled by their clients?

Question

What do insurance companies base their payouts on for cars that have been totaled by their clients?

Answer 1

Most of the larger insurance companies DO NOT use book values. The values in the books do not specify the geographic region which adds or reduces the value of a vehicle.

They use third party sources like Certified Collateral Corporation(CCC). CCC bases valuations on market surveys which are updated several times each month. Vehicle condition, options and mileage are all recorded along with the market price. When a vehicle is totaled, CCC compares the loss vehicle to similar make/model/year vehicles in the database, and provides the insurance company with supporting documentation.

If you want to know the ACV of your vehicle, the closest book value is nadaguides.com. Use the low value.

Answer 2

Insurance companies base their payments on current market value of your vehicle. In other words, Kelly Blue Book fair value.

Answer 3

There are three different ways a car can be insured, but the most common is "actual cash value".  That means, they'd pay actual cash value, less your deductible.  

To find the approximate ACV of your car, go to www.kbb.com and look at the private party sale value.  

Check with your agent, to see if your policy is an ACV policy.  But 95% of them are.