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Quote Unquote – July 23, 2008

July 23, 2008

Q) My insurance company said that my vehicle was a "total loss"
after my accident. How did they decide that?

A) When you make a claim for damages to your vehicle, your insurance company will pay the lower amount of either:  

  • The cost to repair the loss or damage or
  • The "actual cash value" of your vehicle at the time it was damaged.


"Actual Cash Value" is the amount necessary to replace your vehicle with a similar vehicle. The insurance company takes into consideration the age of your vehicle, the mileage, the average retail selling price as well as the condition of your vehicle.

If it will cost the insurance company more to repair the damage than the vehicle is worth, they will decide that the vehicle is a "total loss" or write off. For example, if a car has a retail value of $3,000 and the cost to repair the damage is estimated at $4,000, the company will pay the lower amount. 

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