If you have recently totaled your car, it's certainly a traumatic and stressful experience. After the shock wears off, it's time to start working with your insurance adjuster to determine how much your car is worth. Your auto insurance policy will have a section that tells you how much your carrier will pay you for your car, but the difficult part is determining the value. So it helps to know exactly how an insurance company, such as Martin Insurance Company, determines the value, in order for you to get the maximum amount of money. This article will provide a brief overview on how the value is determined.
Value for Replacement
Your auto insurance company will pay you what they determine to be the market value for your car. This would mean how much it would cost to buy the exact car at your local dealership. All cars are different, so the adjuster does take into consideration the mileage of your car, and the condition your car was in before it was totaled. The adjuster's final number should be what it would cost you to replace your car with a vehicle that's similar in make and model, condition, age, and mileage.
Final Value Determination
Once the payoff value for your car is calculated, the adjuster will take into consideration the amount of sales tax, registration fees, and other costs that are associated with purchasing a car in your location. You can always negotiate with the insurance company if you do not agree with the final value. However, to be successful in your argument, you need to have evidence to back up your reasoning as to why their value is too low. You may have a valid argument if you just replaced an expensive part of your car, and that replacement value was not taken into consideration.
Balance of Your Loan
The insurance company will not consider how much you own on your car loan when it's determining the value of your car, even though you need to pay off the loan before you can purchase another car. If the insurance company places the value of your car higher than the balance on your loan, the insurance company will most likely pay off the loan and give you the balance. If you owe more than the car is worth, you'll have to make up the difference when paying off the loan. Some car lenders will let you roll the balance due on your old car into a loan for a new car. You will have to discuss those options with their lender.