After a big crash your vehicle may be declared a total loss. This occurs when a vehicle cannot be structurally repaired. However, the vehicle may also be totaled if the cost of the repair is more than a certain percentage of the fair market value of the vehicle before the motor vehicle accident. This value is usually between 70% to 80% of the fair market value of the vehicle.
The fair market value of a vehicle is the legal term used to describe the amount that a buyer, under normal circumstances, would pay for a vehicle and the amount a seller would, under normal circumstances, accept for the purchase of the vehicle. By normal circumstances we mean that a seller and buyer are not being forced to sell and purchase the vehicle. A determination of the fair market value will look at the year, make and model of the vehicle. It will take into account improvements and upgrades to the vehicle, the condition of the vehicle and mileage. Normally, recent repairs or oil changes do not increase the value of a vehicle and are not considered. However, things like new tires or an exceptional stereo system may be taken into account.
The insurance company is required to rely on data about actual sales of similar vehicles that have taken place in your region or local market. There are several companies that survey the market and report this information to insurance companies. The two largest of these companies CCC and ADP. Some insurance companies will simply rely upon Kelly’s Blue Book or the National Automobile Dealers Association (NADA) to determine the fair market value of a vehicle.
Knowing how the fair market value is determined by insurance companies may help you get a fair deal whet determining the total loss of your vehicle. Remember that knowledge is power when dealing with an insurance carrier. If it looks like the offer is unfair or extremely low, then you should contact a local attorney to determine what your rights are in this matter.
After a Crash, Don’t Accept Quick Cash… If you are injured in a car accident, call Whitener Law Firm for New Mexico Attorneys who know New Mexico law. Contact us Online or call 883-RUSS for a free consultation to find out if you have a personal injury claim.