How is Actual Cash Value (ACV) Determined by Insurance Companies?

How is the Actual Cash Value (ACV) of my Car Determined by my Insurance Company?

The actual cost value of your car is determined in a similar to the way that a car salesman determines the value, except you will see a little bit more actual cash value oppose to the numbers car salesmen might say. The car you go under a checklist that compares your car to other similar cars. The information could be from your zip code, other car dealerships, private sellers, and recent sales in the area. Don't think that they are only comparing your car to other car. They are also putting in your mileage, the inside condition, special features, radio, comfort, and rarity.

This obviously cannot be done by hand, so insurance companies use a computerized evaluation process to help them further estimate the correct AVC. They could also use software that links multiple-parties together (insurance companies that use the same software can compare cars to each others information). They use these tools to help determine the amount of work needed to refurbish the car from repair shops to dealer.

But, if you are a private collector the AVC applies differently. Instead of getting an actual cost value, you must purchase 'stated value policy.' This policy is for classic restored vehicles. There are various criteria's that figure out your AVC. If want to get your car appraised at a dealership, go and ask him what he is checking for. I hope I was able to help you out. Good luck!