Filed under auto insurance claims questions.

What do insurance companies base car value for insurance claims?

The insurance company’s car claims adjuster sees the car as an object and does not take into consider personal value. His job is to determine market value. This forms part of the base rate. The usual process is to compare vehicles of the same model and year, usually 2 or 3, to help evaluate the base rate.

The claims adjuster will normally quote a base value on the lower end for 2 main reasons:

  1. The policy holder will dispute the amount and try to negotiate for a higher figure which gives him some allowance to work with and
  2. The car may be only good for parts

The more cars the claims adjuster uses to compare, the lower the value becomes. As the policy holder, you can ask for the evaluation report to find out how many cars he used in his comparative analysis. You can also request for less cars if you think the number is excessive.

Owners of classic cars are a special case because the market value is usually lower. Claims adjusters can use the value of a beat-up version instead of a well-maintained, mint condition car to compare values. This will be very effective in bringing the base value down.

Dealing with unresponsive insurance companies or providers who have a history of bad claims customer service can be extremely frustrating to policy holders. If you are in the market to compare rates feel free to get an online auto insurance quote.

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