To achieve “comparability,” you or the insurance company may itemize and show the appropriate dollar amounts for deductions or additions for options, and mileage or condition. An insurer must consider information you supply when it determines deductions or additions. However, shared information may not always produce a change in the value.

Know your rights

You have the right to payment of the actual cash value of your auto, and to expect a prompt and fair settlement. Don’t be surprised if your “value amount” and the insurer’s “value amount” do not match. Be ready to negotiate with the insurer when this happens.

How insurers establish the actual cash value of the totaled vehicle

The insurer can adjust and settle your claim using one or a combination of the following methods:

1. Offer to replace the totaled vehicle with a comparable vehicle that is available for your inspection within a reasonable distance from where you garage your car (where you normally park your car).

2. Offer you a cash settlement based on the actual cash value of a comparable vehicle. To arrive at a cash settlement offer, the insurer may use one or more of the following:

find and offer you the cash value of a comparable vehicle in your local area;
obtain a quote for a comparable vehicle from two or more licensed dealers within a reasonable distance of the principally garaged area that does not exceed 150 miles unless there are no dealers within 150 miles;
find two or more comparable vehicles advertised for sale within 150 miles of the principally garaged area in the local media within 90 days prior to or after the date of loss; or
use an independent company to establish a statistically valid actual cash value of the totaled vehicle.

3. If you and the insurer both agree, the insurer may use other appraisal methods (also referred to as valuation methods), such as using independent auto guides.

If the insurer cannot locate comparable vehicles in the area where you normally park, it may expand the search in 25-mile increments, not to exceed 150 miles, until two or more comparable vehicles are identified.

The insurer must add to the actual cash value any applicable taxes, license fees, and other fees required to transfer ownership.

What your insurer must do when you accept the settlement but you cannot find a comparable vehicle

When you accept the initial settlement your insurer must provide you with written notice of the requirements to reopen your claim. They must reopen the claim if you notify them within 35 days of settlement that:

you cannot buy a comparable vehicle for the settlement amount; and
you found, but did not buy a comparable vehicle that costs more than the settlement amount.

Your insurer must then:

find a comparable vehicle that is available for the settlement amount; or
pay you the difference between the settlement amount and the cost of the comparable vehicle; or
buy the comparable vehicle for you; or
value the vehicle as outlined in the appraisal provision of your policy.

Your insurer is not required to reopen your claim if:

at the time of settlement, they provided you with written notice of the availability and location of a comparable vehicle for you to buy for the settlement amount; and
you did not buy the vehicle within five days of the receipt of the settlement.
you previously used the policy appraisal provision in your policy.

Keeping your auto in its damaged condition

If you keep your vehicle, the insurer will deduct the salvage value only after it first calculates the total actual cash value. The total actual cash value includes all applicable taxes and fees. At your request, the insurer must:

give you the name and address of a salvage dealer who will buy the salvage for the amount deducted; and
make this option available to you for at least 30 days after receipt of the settlement.

This option will not exist, if after settlement, the condition of your vehicle has changed. For example, you replace the stereo with one of lesser value.

If you have questions about re-titling your vehicle, call the Department of Licensing, Title and Registration Services, Customer Service Unit at 360-902-3770.

Past auto repairs and maintenance

Money you spent on maintenance and repairs does not translate dollar for dollar to increase the value. But the cost of these improvements may help to maintain the auto’s retail value based upon its overall condition.

When you and the company disagree on the actual cash value

If you and your insurer cannot agree on the value, you may have the right to hire an appraiser via the Appraisal Provision in your auto policy. Under this provision, you and the company each hire appraisers (to find an appraiser, try the yellow pages in your local phone book). The two appraisers try to reach agreement on the value of your car. If they cannot reach an agreement, they will select an umpire to make the final decision. Both you and the company will share the cost of the umpire

If you and the other person’s insurer fail to agree on the value, you can use your own collision coverage. Under this coverage, you are subject to your policy provisions. Your company, if it chooses, may then pursue reimbursement from the at-fault driver or from his or her insurance company.

If you did not buy collision coverage, you will have to settle directly with the other person’s company. This may require the help of an attorney if you cannot reach a settlement on your own. If the value of your claim is under $5,000, you may pursue settlement in Small Claims Court. To pursue larger amounts, you may want to consult with an attorney.

When the actual cash value will not pay off your loan or lease agreement

Unless you bought auto loan/lease gap coverage, you are responsible for the difference between the actual cash value of your auto and the outstanding balance owed to the lender. You may want to contact your lender about extending your existing loan to any replacement auto loan.

Obtaining a rental car

If you are dealing with your own company, you must have rental car coverage included in your policy. When you are ready to settle your claim, your company may stop rental car payments even though you may not have used all the coverage.

If you are dealing with someone else’s insurance company, the insurer can negotiate the costs for a rental vehicle. If the insurer offers a flat rate, it must tell you where you can get a rental vehicle for that amount.

The insurer wants to move your auto prior to settlement of the claim

With your permission, the insurer may move the auto to eliminate additional storage costs. If you do not consent to moving the car, the insurer may require you to pay any additional storage costs.

Your insurer denies storage costs

Your insurer must advise you by phone or in writing before they stop payment for storage. They must also provide reasonable time (up to five calendar days) for you to remove your vehicle from storage.

The insurer must handle settlement of your auto claim separate from your injury claim

The insurer must keep the total loss settlement procedure separate from any other portion of your claim, such as: Personal Injury Protection, Bodily Injury, or Uninsured Motorist Bodily Injury.

Department of Licensing regulations for destroyed or wrecked autos

The Department of Licensing regulations provide definitions for a destroyed or wrecked car:

Revised Code of Washington (RCW) 46.12.005 (2)

RCW 46.80.010 (6)

Washington Administrative Code (WAC) 308-56A-460

The following WAC sections also apply to Total Loss settlements:

WAC 284-30-330 (12)

WAC 284-30-3907 through WAC 284-30-3916

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Definitions you need to know

Actual Cash Value:

Comparable vehicle: