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Written by: J. Todd Tenge

How Is Totaled Car Value Calculated by the Insurance Company?

| Read Time: 3 minutes

When you’re in a car accident, your insurance company may declare your vehicle a total loss.

The insurance adjuster must determine whether it makes financial sense to repair your vehicle or not.

If repair costs exceed the value, the adjuster will likely issue a check for the total loss of your vehicle.

Before accepting a settlement, you might want to know how a totaled car value calculator works and what factors impact your car’s value.

If another driver caused the accident, you might have the right to bring a diminished value claim in Colorado.

Here’s what you need to know about diminished value claims and determining the total loss value of your vehicle.

Calculating Total Loss Value

totaled-car-value-calculator in colorado

Depending on your insurance coverage, your own insurance company might pay for the vehicle’s damage under first-party coverage and pursue the at-fault driver’s insurance company for reimbursement.

The insurance industry refers to this as subrogation. Or, the at-fault party’s insurance may resolve your property damage directly as part of your third-party personal injury claim.

There is not a totaled car value calculator per se. Colorado law determines whether an insurer will declare your vehicle a total loss or not.

C.R.S. § 42-6-102 (17)(C) defines a salvage vehicle as one that is damaged in a collision, and the extent of repair costs exceeds what the vehicle’s retail fair market value was immediately before the accident.

Insurance companies determine fair market value using industry-accepted sources, such as price books, certified appraisals, dealer quotes, and computerized valuation services. 

Defining Diminished Value

The term diminished value references the difference in your car’s average market value before and after an accident.

When the insurance company opts to repair a vehicle, it will not be worth the same as it was prior to the accident.

Insurance companies refer to the difference as diminished value. Colorado law allows you to bring a claim for diminished value.

This type of claim is presented to the other driver’s insurance company, not your own.

Insurance policies typically include a clause that says you cannot bring a first-party diminished value claim against your own carrier.  

There are three main types of diminished value:

  • Immediate diminished value: loss of value immediately after an accident, before repairs are made;
  • Inherent diminished value: loss of auto value that remains once professional repairs are completed; and
  • Repair-related diminished value: loss of value from poor or incomplete repairs.

If you have a lease car accident, a diminished value claim may not be possible. Different lessors handle diminished value claims according to their own policies and procedures.

Your Colorado car accident lawyer can help you determine your rights as a lessee in this situation.

How to Calculate the Diminished Value of a Wrecked Car

Insurance companies use a simple formula, or a car accident diminished value calculator to reach the proper value.

The adjuster starts by determining the market value of your vehicle before the accident.

Next, they will determine what the value is following repairs.

You reach the diminished value by subtracting the value amount after the accident from the pre-accident value.

Contact a Colorado Car Accident Lawyer

After a crash, you may be wondering, “How do I determine the diminished value of my car?” Let the experienced legal team at the Tenge Law Firm, LLC help.

We have years of experience assisting injured victims with their accident claims, including those for property damage.

Insurance companies use numerous tactics to ensure they pay out the lowest amount possible in a personal injury claim.

We can help you pursue the maximum compensation, including the value of your vehicle.

Contact our office today to schedule a consultation. Let us help you fight for the compensation you deserve.

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