How do insurance adjusters determine the value of a car? (2024)

Your car accident was bad enough, but the aftermath can be even more stressful. Once you file your car insurance claim, you might find out your car is totaled. The insurance company might surprise you by valuing your car at a rate less than what you expected. 

After your car is valued for less than you expected, you might wonder, “How do insurance adjusters determine the value of a car?”

The insurance valuation process might seem random and make you feel lowballed as the proposed number might differ vastly from what you were expecting. Insurance adjusters don’t assign random values. So then what do car insurance adjusters look for?

There are standard methods they have to follow to set a price for your vehicle, and you can also negotiate to get a better value. Let’s take a look at exactly how does an insurance adjuster value a car and how do adjusters determine if a car is totaled. We’ll also cover what happens after the car insurance adjuster comes out and how to negotiate with your insurance company after a car accident.

How do insurance companies determine a car’s value? 

So, exactly how do insurance companies determine car values? While most valuation complaints happen after a total loss settlement, a valuation happens anytime you make a claim. Your car will be valued even if you claim minor fender bender damages.

All of your claims will result in the adjuster valuing your vehicle no matter how significant the incident was. The adjuster will then opt to repair or replace your car based on its value versus the amount repairs might cost. 

So how do claims adjusters determine value? What do auto insurance adjusters look for? This is the process an auto insurance claim adjuster will follow to value your damaged car:

Inspecting the Damaged Vehicle

The car insurance inspection after accident is the first step in the valuation process. Once you file your claim and disclose the damage to your car, the insurance company will send an adjuster to you or the repair shop to conduct a thorough inspection of the car. 

The inspection is to estimate the extent of the damage. Based on this, the insurer will decide whether it is worth paying for repairs or not. 

At what percentage of damage is a car considered totaled? If the repairs are more than 70% of the actual cash value of the car, the car will likely be declared a total loss. 

Assessing the Car’s Condition

This step is important as it’s how the insurance company decides the value of your car. If you have filed a claim, you’ll want to know, what’s the actual cash value of my car? Well, the adjuster will need to access your car to determine the actual cash value (ACV) of the car. An adjuster can’t just look at the car and decide the car’s value.

But in that case, what do insurance companies use to determine car value? Insurance adjusters have guidelines and resources at their disposal to determine the car’s value.

These are the common factors that insurance companies use to determine the value of the car:

• Make, model, and year 
• Depreciation
• Pre-loss condition of the car
• Mileage at the time of the accident
• Salvage value
• The sales value of similar cars in the region

The insurance adjuster will derive a fair value for your car by evaluating your car on the above-listed points. Additionally, sometimes they may use a totaled car value calculator or specifically, the Kelley Blue Book totaled car value calculator.

Estimating the Cost of Repairs

The adjuster will then compare the fair market value with the estimated cost of repairs and replacement parts to determine the amount the insurance company should pay or to see if the car repair cost is more than worth the insurance payout. You might wonder, how do insurance adjusters determine the value of a totaled car? If the repair costs are 70% of the ACV of the car, the car will almost always be totaled. 

The average insurance valuation of the totaled car will depend on the ACV of the car. How do insurance companies determine car value? Once the insurance company has estimated the amount, you will either receive the cost of repairs or the ACV of the car. 

You Can Negotiate the Claim and the ACV of the Car 

How can you get more claim money from your car insurance? The answer is by negotiating. You buy insurance so that in case of an accident, your insurance company will pay for the damages, but sometimes you have to push to get an acceptable amount of money back. But can you negotiate with an insurance adjuster on a auto total loss? And if so, how do you negotiate with insurance on a totaled car?

You can even ask your insurance company to total your car if you think they’ve underestimated the cost of repairs, the impact on your vehicle’s future value, or if you think you would be better off replacing a crashed vehicle than repairing it. However, it is always up to the adjuster to make the final call after a car appraisal after an accident.

If your car is totaled in an accident, you can drive up the value of the car by making these points:

• List the additional features of your car
• Give the estimated retail value of your car
• Present comparable sales data of similar cars in your region

These points will give you wiggle room and will help drive up the value of your car. Make sure you know how to negotiate with car insurance adjusters about a car being a total loss and how to get the most money from insurance for a totaled car.

The Replacement Value of Your Vehicle Isn’t Random

The insurance valuation of your car isn’t based on a whim. So, how does an insurance company determine car value? Insurance adjusters have valuation guidelines and resources they can use to help calculate your car value after an accident such as checking the Kelley Blue Book used car value or another total loss car value calculator tool.

While there is a valuation method, insurers prefer the lowest value of the car as opposed to the policyholders, who would prefer to get the highest possible value for their vehicle. This is why the claim amount you receive is sometimes less than your expectations.  

However, if you are not happy with your car insurance valuation, you can negotiate the initial claim amount proposed by the insurance company to get a higher claim payout from your insurer.