1. Gathering Information:
* Vehicle Identification Number (VIN): This is crucial for accessing the vehicle's history, specifications, and original equipment.
* Accident Report: Provides details about the accident, including the extent of damage.
* Photos and Documentation: The appraiser reviews photos of the damage from all angles, as well as any repair estimates.
* Vehicle Inspection: A physical inspection is usually required, where the appraiser assesses the extent of damage, both visible and hidden.
2. Valuation Methods:
Several methods are used, often in combination, to arrive at the pre-accident FMV:
* Market Data: This is the most common method. The appraiser uses resources like:
* Automated Valuation Models (AVMs): These are computerized systems (like those used by Kelley Blue Book (KBB) and Edmunds) that use a database of comparable vehicles sold recently to estimate value based on factors like year, make, model, trim level, mileage, condition, and features (options). These are often the starting point.
* Auction Data: Auction prices for similar vehicles can provide valuable insights, especially for unusual or high-value cars.
* Dealership and Private Party Listings: Recent listings for comparable vehicles provide a real-time snapshot of the market.
* Repair Cost Estimation: A detailed estimate from a qualified repair shop is necessary. The appraiser compares the cost of repairs to the pre-accident FMV. If the repair cost plus salvage value exceeds the pre-accident FMV, the vehicle is typically declared a total loss.
* Salvage Value: This is the estimated value of the vehicle after the accident, considering the remaining parts. If it's a total loss, the salvage value is considered when determining the payout to the owner.
3. Determining Total Loss vs. Repairable:
The appraiser weighs the repair costs against the pre-accident FMV. A common rule of thumb is that if the cost of repairs plus salvage value exceeds a certain percentage (often 70-80%) of the pre-accident FMV, the vehicle is declared a total loss. However, the exact percentage can vary by insurance company and state regulations.
4. Factors Influencing Value:
Several factors influence the final valuation:
* Vehicle Condition: Pre-accident condition (wear and tear, maintenance history) impacts value.
* Mileage: Higher mileage generally lowers value.
* Modifications: Aftermarket modifications (if properly documented) can increase or decrease value depending on their desirability.
* Location: Vehicle values can vary geographically.
* Market Fluctuations: Supply and demand affect values, especially in times of economic change or shortages of specific vehicles.
5. Dispute Resolution:
If the insured disagrees with the appraiser's valuation, they can typically appeal the decision through their insurance company. Sometimes, an independent appraisal might be necessary to resolve the dispute.
It's important to note that the process isn't always perfect. Appraisers aim for fairness and accuracy, but subjective judgments are sometimes involved. Having comprehensive documentation and photos of your vehicle before the accident can be invaluable in supporting your claim.
