What is a Total Loss Appraisal? 

The insurance adjuster will consider a vehicle to be a total loss when he/she determines that it cannot be repaired because the repair cost exceeds the value of the vehicle as estimated by the adjuster. A vehicle is considered a total loss when the cost of repairs (as estimated by the adjuster) equals or exceeds the actual cash value of the vehicle.

A total loss appraisal indicates a formal assessment of a vehicle's ACV (actual cash value), reflecting its fair market value immediately before the accident occurred. Often, to avoid paying claims from policyholders, many insurance providers choose to give policyholders lower than the fair market price for their damaged vehicle. An independent appraisal done by a third-party appraiser is one method to use to dispute the offer amount.

How does the Appraisal Work?

The following steps describe how a total loss appraisal works.

Initial Assessment

In response to your report to the insurance company, an adjuster will arrive at the location of the accident to review your vehicle and decide how much it would cost to fix. 

Valuation

To determine your vehicle's actual cash value (ACV), the insurance adjuster will evaluate several factors, including the age of the vehicle (calculated from the original purchase date), the mileage it has accumulated, the maintenance history before the incident, and the demand for similar vehicles in your locality.

The Threshold

If the estimated cost of repairs will exceed an allowable percentage of actual cash value then vehicle has been declared to be total loss.

Settlement

The insurance company will pay you the ACV minus deductible.

Dispute Resolution

If you disagree with the amount the insurance company has offered you, you may retain an independent appraiser to assist you in obtaining a larger settlement or use the appraisal provision in the policy as a mechanism to get an impartial umpire.

Types of Total Loss Appraisals

There are different types of total loss appraisals. Keep reading to learn about them.

Insurance Appraisal

The insurance adjuster will conduct their appraisal using automated databases, such as CCC Intelligent Solutions or Mitchell International.

Independent Appraisal

They are also a separate evaluator hired by you to help you appeal against the insurance adjuster's lower settlement offer.

The Appraisal Clause

This is a policy provision that allows you to hire your own appraiser if you disagree with the insurer’s settlement offer. In case the two appraisers can’t agree on a value, a neutral umpire is summoned to make a final binding decision.