Fair Market Value

• Most often, auto insurers use a car valuation organization to determine the fair market value of your vehicle. These include Kelly Blue Book, National Automobile Dealers Association (NADA), The Black Book and many others. There is no regulation that determines what value an insurer uses to value your vehicle.
  
  

Repair Quotes

• Insurance companies will ask that you obtain several quotes from licensed repair shops to begin determining how much the vehicle will cost to repair. The insurance adjuster will also make repair valuations based on experience and relationships with repair shops to determine the actual repair cost.
  
  

Repair Cost vs. Car Value

• The insurance company will determine whether or not the cost to repair the vehicle outweighs the value of the vehicle. If so, the insurer will settle the claim as a total loss, take possession of the vehicle and issue a check to the owner for the amount of the vehicle's value.
  
  

Negotiations

• If the owner disagrees with the assessment, he can refuse the settlement and continue discussions with the insurer or take his claim to court.
  
  

Considerations

• Keep in mind that what the insurance company pays you may or may not be what your car lists as a fair market value based on the condition of the car before it was wrecked. You won't receive top dollar for your car if it wasn't in top condition before the accident.