How Does A Car Insurance Company Determine Replacement Value

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Being involved in an accident may cause serious personal injury or damage to the vehicle. You may decide to file a claim with your insurance company for the damage. When your claim is being studied by the loss adjuster they may check for several factors. Based on those factors, the insurance company determines the claim settlement amount.

A very important aspect that the insurance company considers while dealing with your claim is to check who is at fault. The claim amount you may receive depends on the extent to which you are at fault. The claims adjuster could be your best guide to help you with the claims process. You may give details of the collision and the severity of damage to your claims adjuster. They will give you an idea about the coverage and deductibles that apply.

Your mandatory insurance coverage in Ontario does include the Direct Compensation-Property Damage. You may claim up to the extent of vehicle damage that you are not at fault for. You may claim for the cost of getting a rental vehicle. This depends on your level of coverage and the extent to which it was your fault. There may be few exceptions.[1]

What Happens When Your Car Is Totaled

Car Totaled

When it is not economical or safe to repair the damages, then your car may be totaled. There are two options for the insurance company when your car is totaled.

  1. They will estimate the cost required to repair the damage or loss to the vehicle.
  2. They will also calculate what was the “actual cash value” (ACV) of your vehicle when it was damaged. This is the cost of replacing that vehicle with another and sales tax with GST if applicable. The replacement may be with another comparable used vehicle. This is done on the basis of age, total mileage, equipment, general condition and average retail selling price.

How Much Will My Insurance Give Me For My Totaled Car

The insurance company would choose to pay for the lower of the cost out of the above two options. When the insurance company decides to total your car, they may settle your claim by paying you cash if they chose the second option. There is one exception. If you had chosen the removing depreciation deduction endorsement when you had got cover for a new vehicle. You may ask to settle your total vehicle loss claim for the total list price and not the value after depreciation.

Also remember to let the claim adjuster know if you did any repair work on your car and give them receipt copy. It may be your responsibility to buy another vehicle if your claim is settled with cash. In some cases, you may feel that that claim settlement was not fair. You may check the price of comparable vehicles with dealers or trade publications. Get the average price by research. If it varies much, inform and follow up with your insurance provider. They may comply.

In cases of disagreement of claim amounts less than $10000 you may approach the small claims court. If the amount is higher, getting legal advice may be wise.

 

[1] https://www.fsco.gov.on.ca/en/auto/brochures/Pages/brochure_claims.aspx#expect

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