When your policy provides for payment of the actual cash value or replacement with one of the same kind or quality, here are some things to remember when negotiating with the insurance company.
A total loss occurs when the cost of repairing your car is greater than 75% of the current retail value of the car as determined by comparing it to national publications or databases such as the Kelly Blue Book or NADA. Ala. Code §32-8-87(d).
If the insurance company offers a replacement, it must be of the same make, model, year (or newer) and similar features as the old car. Al. Admin. Code §482-1-125.08.
If the insurance company pays you money, it must be enough money to buy such a replacement, including applicable taxes and fees. Ala. Admin. Code §482-1-125.-08.
If the insurance company settles the claim in any other way, (for instance if the insured wants to keep the totaled car), the company has to completely itemize the payment giving particulars of the car’s condition. Any deductions from the replacement cost, including salvage value, must be “measurable, discernable, itemized, and specified as to dollar amount.” The amount must be fully explained to the policyholder. Ala. Admin. Code §482-1-125-.08.
We represent policyholders against insurance companies and can sometimes help with high value total losses of automobiles and other substantial losses. However, even if we can’t help you directly, we hope that you find this information helpful.
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