Auto Insurance Company Chesapeake Virginia VA
Reader’s Question:
How do I know my car’s actual cash value? Do insurance companies here at Chesapeake compute the cash value differently from other companies in other states?
Beverly
Chesapeake, VA
Each automobile insurance company has its own formula for computing a vehicle’s actual cash value. Likewise, some states give out certain rules, especially when it comes to auto insurance policies, making the cash value computation more varied. Typically, the computation for actual cash value is based on subjective judging – with the depreciation and current condition being taken into consideration. There are also more objective details that are being considered such as the mileage and the car’s age. Some insurance companies have developed less “subjective” ways of computation wherein computerized evaluation is involved. Normally, the computer assistance they get come in the form of third party systems, although some prefer to have their own programs custom-made so that it suits well with their needs. These computer programs give the company an access to a database that determines the true value of every repair in different repair shops and that makes benchmarking easier, too.
Actual cash value is basically the cost of replacing a vehicle or a part of it at the time of the damage, less the depreciation value (sometimes a deductible is included in this computation). This cash value is often compared to another similar vehicle’s value to make sure that the computation is right. Often, an automotive insurance company would get the inputs of local auto dealers and some third parties to determine the car’s value.