What are the insurance guidelines with regard to allotment of extra funds for new parts after a vehicle is totaled?

Answer 1

This is an age-old question in the claims adjusting field. Essentially, when a vehicle is totaled, the carrier owes for the actual-cash-value of that vehicle. It can't possibly pay dollar-for-dollar for each component (like a transmission) on a vehicle because, of course, that would make any vehicle worth two to three times its actual-cash-value. The vehicle is valuated as a "whole," not piece by piece. For instance, say you have a car worth $2,000.00. You love the car, but the engine block has a crack in it. Instead of getting a new car, you decide to replace the engine, which costs you $2,500.00. Does that mean that your car is now worth $4,500.00? No. What it means is that it's still a $2,000.00 car, with a better engine that might add a couple of hundred dollars to the price. Look at it this way: If you didn't replace the engine, what would the car be worth? Nothing, really, except salvage value. It sounds like you replaced your transmission five days prior to being in an accident that totalled your car. If that's the case, make sure you provide any receipts to the carrier that's settling the total. Most claims adjusters will take major refurbishments -- like a transmission -- into consideration, but they won't match the cost of the transmission dollar-for-dollar. Or, if they do match it dollar-for-dollar, they will adjust the value of the car prior to having a working transmission, which will essentially give you the same actual-cash-value.