You may not realize it, but a car is an investment. A vast majority of people will sell their car or trade it in at some point. Damage to the car can really impact the value.
The cash value of a car is known as the ACV, and is the benchmark used by insurance companies to determine the feasibility of paying to repair an automobile after an accident, or just paying for its replacement. Each insurance company will have its own method of determining the ACV, and each will have its own cut off point for its decision to declare the auto a total loss. Incidental expenses that may or may not be included in the policy include fees for storage and rental vehicles for use during the repair time. The incidental expenses will be factored into the decision making process along with the damage estimate.
Another factor that will great impact the ACV of a car is prior damage. Prior damage can be damage from a previous accident that has never been repaired. It also might just be rust and the resulting body damage, caused by the neglect of the owner. The insurance appraiser is going to take note of prior damage, and subtract it from the ACV. This is not totally unjust. An undamaged and well maintained car is going to sell for more, and quicker, on the open market.
Cracked windows, dented, scraped, or rusted body parts will all be considered prior damage. A badly stained and torn up interior will greatly detract from the ACV also. Very little will escape the eye of the trained insurance appraiser. If the decision is made to pay for repairs, the insurance company is not going to pay for the repair of previous damage. The idea behind auto insurance is that the automobile should be restored to the condition that existed at the moment of the current collision.
When the insurance appraiser has calculated the ACV of the automobile, at the moment of the accident, then he can compare it with the repair cost and the cost of related expenses and make a decision. If you are going to contest the ACV determination by doing a little market research yourself, make sure you consider prior damage also.
An accidental collision is something we all seek to avoid. When one occurs, and hopefully, everyone walks away unharmed, the idea is to try to avoid unnecessary loss. It is to be restored to the moment of the accident. It may make sense, if the car is going into the auto body shop for repair, to use this opportunity to get that old dent hammered out. It might make sense to get a completely new paint job, and even four new tires. Just don’t expect the insurance company to pay for it.
Ernie Yetis is with AutoBodyShopStop.com - providing
auto body repair information.
