Unraveling The Mystery Of Extra Features In Auto Insurance Adjustments

Auto insurance adjusters are responsible for evaluating a vehicle's value following an accident or insurance claim. They consider several factors, including the vehicle's make, model, year, mileage, condition, accident history, and market value. Extra features, such as customisations, additional equipment, and upgrades, are also taken into account when calculating the value of a car. These adjusters work for insurance companies and are the main point of contact for claimants, investigating the claim details and negotiating settlements.

Vehicle type, make, model, and year

The make, model, and year of a vehicle are crucial factors in determining its insurance value. This is because these elements influence the car's market value, repair costs, safety ratings, and likelihood of theft, all of which impact insurance rates.

The make and model of a car can affect its insurance rate based on how often that particular make is involved in insurance claims, the average cost of repairs, and its safety features and ratings. For instance, certain makes and models are known to cause more damage than others, leading to higher insurance claims and repair costs. On the other hand, vehicles with higher safety ratings and features may benefit from lower insurance rates.

The year of a car model also matters because manufacturers introduce changes from year to year. Newer models may have more advanced safety features, but they are typically more expensive to repair due to their higher replacement cost and more complex features or electrical components. Additionally, older vehicles may have less robust security features, making them more susceptible to theft and resulting in higher insurance rates.

When determining the value of a vehicle, insurance adjusters consider not only its make, model, and year but also its pre-loss condition, mileage, and the sales value of similar cars in the region. This information helps them assess the actual cash value (ACV) of the car, which is crucial in deciding whether to repair or replace it after an accident.

In summary, the vehicle's make, model, and year play a significant role in calculating insurance rates, and insurance adjusters use these details, along with other factors, to determine the ACV and the appropriate insurance value.

Extra features and customisation

When it comes to auto insurance, extra features and customisations on your vehicle can impact its value and, consequently, the insurance payout you may receive in the event of a total loss or repairs. Here's what you need to consider:

Understanding Actual Cash Value (ACV)

The actual cash value of your car is a crucial factor in determining insurance payouts. It is the current market value of your car, taking into account depreciation. When your car is damaged or deemed a total loss, the insurance company will typically reimburse you for the ACV of the vehicle, minus your deductible. This value is influenced by factors such as make and model, mileage, overall condition, and location.

The Impact of Extra Features and Customisations

When calculating the ACV of your vehicle, insurance adjusters consider various factors, including any extra features or customisations. This could include upgrades such as a premium sound system, sunroof, keyless entry, alarm system, or power windows, custom rims, or aftermarket electronics. These additions can increase the value of your car and, therefore, impact the insurance payout.

Documenting Extra Features

It is important to keep records of any extra features or customisations you have added to your vehicle. In the event of a claim, providing detailed documentation of these additions can help increase the adjuster's valuation. This documentation can include receipts, invoices, or other proof of purchase and installation.

Negotiating the Value

If you believe the insurance adjuster's valuation does not adequately reflect the value of your extra features or customisations, you have the right to negotiate. You can start by discussing your vehicle's options with the adjuster to ensure they are aware of all the upgrades. It is also helpful to do your own research and present comparable sales data of similar vehicles in your area with similar features. This information can strengthen your case for a higher valuation.

Appraisal and Arbitration

If you still disagree with the insurance adjuster's valuation, you can hire a private appraiser to provide an independent assessment. This will be at your own expense, but it can give you more leverage in negotiations. If negotiations with the adjuster remain unresolved, you have the right to seek arbitration, where a third party will be involved to help reach a final decision on the matter.

Mileage and kilometres driven

Insurers will ask about your annual mileage when determining your car insurance rates. They will want to know how many miles or kilometres you drive to work and your average number of miles or kilometres driven per year on weekends. It's important to provide an accurate number and let your insurer know if any changes in your employment or lifestyle result in you driving more or less. Some insurers may request mileage checks during the year if your stated mileage is lower than average. Your vehicle identification number (VIN) is recorded when you take your car for repairs, and your insurer could request these records to assess your annual mileage.

The average number of miles driven per year in the US is 13,476, according to the Federal Highway Administration (FHA). Insurers often use mileage brackets to determine insurance rates, and these can vary from company to company. Common mileage brackets include 5,000, 7,500, 10,000, 12,000, and 20,000 miles per year, with insurance rates increasing as mileage goes up. For example, Insure.com found that a policy with 20,000 miles or more driven annually was 36% more expensive than a policy for a driver who drives 5,000 miles or less per year.

Low-mileage drivers may benefit from lower insurance rates or discounts. Some insurers define low mileage as driving less than 10,000 miles or kilometres per year, while others set the threshold at 7,500 or 7,000. Premiums for low-mileage drivers are typically lower because there is a reduced risk of accidents and claims. If you drive less than 26 miles or kilometres per week, you may also be eligible for "pay per mile" insurance, where you pay for each mile or kilometre you drive.

If you start driving less, be sure to update your insurer with your new estimated annual mileage, as this may result in lower premiums. You can also consider usage-based insurance programs, where your driving behaviour and mileage are monitored through an app or a device plugged into your car's diagnostic port. These programs often offer discounts for safe driving habits.

Current condition of the interior, exterior, engine, and tires

When assessing the value of a vehicle, insurance adjusters will take into account the current condition of the interior, exterior, engine, and tires. This is a crucial step in the valuation process, as it helps determine the actual cash value (ACV) of the car. Here's a more detailed breakdown:

Interior Condition:

The adjuster will inspect the overall condition of the car's interior, including the seats, dashboard, headliner, and door panels. They will look for any signs of damage, wear and tear, or previous repairs. Spacious and well-maintained interiors can add to the car's value.

Exterior Condition:

The exterior condition plays a significant role in the valuation. Adjusters will assess the car's body, paint, windows, and exterior lights. They will look for dents, scratches, rust, or any other visible flaws. A well-maintained exterior with minimal damage can increase the car's value.

Engine Condition:

The engine is a vital component of the vehicle's overall value. Adjusters will inspect the engine for any signs of damage, leaks, or mechanical issues. They will also consider the engine's performance, such as its smoothness, acceleration, and fuel efficiency. A well-maintained engine with no major issues can positively impact the valuation.

Tire Condition:

The condition of the tires is also taken into account. Adjusters will check the tread depth, tire wear, and overall condition of the tires. Properly inflated tires with sufficient tread depth and no significant damage can enhance the car's value.

It's important to note that insurance adjusters follow specific guidelines and resources to determine the value of a vehicle accurately. They will consider the make, model, and year of the vehicle, mileage, and sales value of similar cars in the region, in addition to the condition of the car. This comprehensive assessment helps ensure a fair and accurate valuation of the vehicle.

Sale price and local market value

When a vehicle is damaged in an accident, the insurance company will send an adjuster to assess the damage. The adjuster will first determine whether the car is a total loss, which is usually defined as the cost to repair the vehicle exceeding a certain percentage of its value, typically 70-75%. If the vehicle is deemed a total loss, the adjuster will then conduct an appraisal to assign a value to the vehicle. This value is known as the Actual Cash Value (ACV) or fair market value, which is the amount that a reasonable buyer would pay for the car assuming the accident had not occurred.

To determine the ACV, adjusters will consider various factors, including the make, model, and year of the vehicle, its pre-loss condition, mileage, and any additional features. They will also take into account the sales value of similar cars in the region, as local market prices can vary. Obtaining dealership sales reports, repair and upgrade receipts, and a third-party appraisal can help adjusters calculate the ACV accurately.

It is important to note that the ACV of a vehicle is typically lower than the price you paid for it, even if it was purchased new and only driven for a short period. This is because vehicles depreciate as soon as they are driven off the lot, and factors such as mileage, wear and tear, and mechanical issues further reduce their value over time.

If you believe that the insurance company's valuation of your vehicle is too low, you have the right to dispute it. You can negotiate by providing comparable sales data of similar cars in your region, highlighting additional features, and presenting the estimated retail value of your car. It is recommended to do your own research into local market prices and use multiple tools, such as Kelley Blue Book (KBB), Edmunds, and the National Automobile Dealers Association (NADA) guide, to determine the value of your vehicle.

Frequently asked questions