Claims Corner:

How is Value Calculated for a Total Loss?

Have you ever wondered how your client’s Personal Auto total loss claim is evaluated? In the “old days,” insurance companies used to look at the book value of the vehicle and ads for similar cars in the newspaper to determine how much the vehicle was worth. As technology has evolved, so has the industry standard for evaluating total loss claims. Today, most insurance companies, including Western National, partner with industry experts to help determine the vehicle value.

When your client’s automobile is deemed a total loss, Western National submits the vehicle information to our partner, and they generate a multi-page value report. There are many benefits to this process. As you know, insurance regulations can vary widely by state. State regulations (e.g., with how many vehicles we as the carrier are required to compare to the client’s vehicle) are built into our partner’s system — guaranteeing that we stay compliant with all rules and regulations.

In addition, our partner has a database of vehicles to which they compare your client’s vehicle. This effectively creates an “apples to apples” comparison, ensuring that your client gets the fairest and most accurate value possible. The detailed report shows how features of the policyholder’s automobile (e.g., cruise control, heated seats) affect its value. It lists features of your client’s vehicle next to features of comparable vehicles, and shows how the values differ. Vehicle information is easy to update. For example, if your client later discloses that they had new tires on their vehicle, we can add that into the report and generate a new value.

The vehicle value is generated based on the true value of comparable vehicles instead of the listed price of comparable vehicles. The appraisal system determines how much people actually paid for comparable vehicles. This process provides the most accurate vehicle value, but can sometimes be confusing to policyholders. We can work together to help remove the mystery. If you or your client would like to see how we arrived at the value of their car, we are happy to provide you with a copy of the report. You can contact either your Regional Agency Manager or the assigned Claims Representative for details.

Overall, collaboration with our trusted partner makes evaluating the total loss of a vehicle consistent, accurate, and fair. It allows us to get the client their payment quickly, helping make the aftermath of an accident as stress-free as possible for our mutual policyholders.