Phil
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There is a lot of confusion here. Auto polices cover the 'Actual Cash Value' of the vehicle. This has nothing to do with NADA, or Blue Book, or Black Book, the CCC computer program, or any other 'book' method. These are all tools used to help determine the ACV of the vehicle. No one of them is more correct than the other. Another tool used is local dealer quotes, newspaper ads, and recent vehicle sales. They are all used to try to figure out how much a certain type of vehicle is going for in a given geographic area. In reality, just like used auto sales, this is a negotiation. The adjuster is going to try to pay a simple value of the vehicle. It is up to the vehicle owner to show why that value is low. This does happen, but they aren't going to increase the value just because you liked the car.
The ACV of a vehicle is greatly effected by the condition of the vehicle, mileage, and options. Obviously, a trashed vehicle with no options and high mileage is worth less than a low mileage, loaded mint conditioned vehicle.
A note here on financed vehicles. A great many vehicles out there are financed for more money than they are worth. The insurer will pay ACV, not the amount owed on the loan. Many people end up having to pay hundreds, and even thousands after the insurance has paid. I would recommend gap insurance, but since you are taking a $1000 deductible, you are probably trying to save money.
As for the deductible, if the vehicle is repairable, the insurer will pay the cost to repair minus $1000. If the vehicle is a total loss, the insurer will pay the ACV minus $1000, and then take the vehicle. They have bought the vehicle, you don't get the salvage. Some people want it. If so, they are entitled to deduct the ACV of the salvaged vehicle from your settlement. If there is a loan on the vehicle, the insurer will pay what they owe to the bank, and you will owe the balance. |
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OneManWrites
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You've gotten some pretty good answers.
However, as I scrolled down through those answers I noticed, as I almost always do, certain people offering answers with an authoritative tone that are absolutely false.
Moderator forigve me but I do not like to see ignorance perpetuated. A certain answer offered, among the others, reads that if your car is totaled, the insurance company pays trade in or wholesale value and that that could be thousands less than what you paid for the vehicle.
False. Wrong. Not correct. Can I put this more clearly?
There is no such thing as a book value for a car. That's a misnomer. If there were a book value for a car - a value you could get out of a book - NADA or Blue Book or whatever - then it would look something like this:
2002 Honda Civic LX. Book value $5000. Period.
Wouldn't matter if that Honda were rusted out with 200K miles on it, torn seats and a busted windshield.
Wouldn't matter if that Honda were polished and waxed and as close to flawless as the day it left the showroom floor.
The book value would be $5000. If there were such a thing.
I think anyone's common sense would tell them, obviously, that isn't correct.
NADA is the industry accepted guide - for both insurers and car dealers. NADA gives three values - loan value, trade in value and retail value.
Why? Loan value is supposedly what a lender would risk in a loan, although finance guidelines are somewhat lax these days. Lenders seem willing even to loan more than the value of the car at times.
Trade in value is an estimate of what an actual dealer would give in trade for the car. Retail is what you would expect a typical example of this particular car to sell for on a typical car lot.
Again, why are there trade in and retail values? Obviously (there's that word again - kind of goes with common sense) dealers aren't out there selling cars just because they love what they do. They have overhead and they need to make a profit. If they gave as much on trade in for a car as they sell it on the lot at retail, they wouldn't make a profit and they wouldn't cover their overhead (detailing and refurbishing the car so it can be put on the lot costs money too).
OK, drumroll please. Most (I said MOST there) vehicle's values fall between the NADA trade in value and the retail value. I have occasionally seen vehicles so trashed that they are worth less than the trade in value. I have occasionally seen vehicles so well cared for that they are worth more than the retail value. Sometimes market fluctuations will put the actual cash value of a vehicle outside the NADA range as well. This happened, for example, when the gas prices first went up so high a few years back. Suddenly, used fuel efficient vehicles were in high demand. Many such vehicles brought more than the NADA retail figure.
People. Please. Stop answering questions out of abject ignorance. If what you have to offer is a perpetuation of misconceptions and myths, surely you have something better to do. If an insurer has to pay a claim for the total loss of a car, they pay the actual cash value of the car. ACV is what the reasonable person would pay for that car, the calculation of which is based in part on the NADA RANGE of figures.
As for that deductible question - you pay the first $1000, the insurer pays the rest. |
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Dec08Mommy
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correct - but you will only get the "blue book value" on your car and if you have a loan, the $ goes right to the loan company and if you still owe $$ on your car, its your responsibility. The higher the deductible, the lower the premium. Of course, it more out of your pocket IF you have a claim. You should call your insurance agent for clarification on your specific policy |
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turg143
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Yes, you have to pay the first 1000$ on a claim, the insurer will cover the rest. |
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ernesto_tig
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It means if your car is damaged, you pay the first $1000 of repairs OR if your car is totaled, you get Actual Cash Value minus $1000. |
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Tan D
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To make it simple for you, I use two simple examples.
- If your damage cost $1500, you will have to pay $1000, and claim $500 from the insurance company.
- If your damage cost $900, you will have to pay the $900 yourself. |
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Pengy
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The $1000 is the deductable for your collision insurance ie if you get in an accident, that is your fault you will have to pay $1000 towards the repair. If you total your car you will get blue book trade in value (look up the differences in trade in selling, and dealer price at kbb.com) minus $1000 and then will be responsible for the rest that is financed on the car. |
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jayjay
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I am assuming your are speaking of a property damage deductible. While I agree with the previous answers in general, there are additional considerations. First, many insurance companies will waive the deductible IF they find you not to be at fault (assuming you are in a non no-fault state). Second, even though you will initially not be reimbursed the $1,000, that does not mean you lose your right to go after the other driver for your deductible (again assuming you are not a fault). |
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Jason
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You pay the first 1,000 dollars for comprehensive or collision claims. If you total your car or it is stolen and not recovered the company will pay you the amount owed less your deductible. |
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mbrcatz
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It means that YOU pay for the first $1,000 of damage. If your car is only WORTH $1,000, you get nothing.
Effectively, whatever the "actual cash value" of the car is, the insurance company will subtract $1,000 from the check. |
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j c
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Yeah, what they said. |
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luckyone_27105
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Everyone is right about damages or value of the car minus $1K. What they don't tell you is the insurance company values the car based on trade in or wholesale value if it is totaled. Possibly thousands less than you paid for it. Also if the car is a relatively new purchase check on "gap insurance". Most cars are not worth what you owe for them and the gap insurance covers that difference if it is totaled. |
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