<PAGE>

                              REVISED SALVAGE AGREEMENT


         This REVISED SALVAGE AGREEMENT is made and entered into this 29th day
of April, 1996 by and between ALLSTATE INSURANCE COMPANY, an Illinois insurance
corporation ("Allstate") and INSURANCE AUTO AUCTIONS, INC., a California
corporation ("IAA").

                                     WITNESSETH:

         WHEREAS, On December 1, 1993 IAA purchased the reclamation operations
with respect to total loss and recovered theft vehicles (and not the claims
training, research and appraisal operations) of Tech-Cor, Inc., a wholly-owned
subsidiary of Allstate (the "TECH-COR ACQUISITION");

         WHEREAS, following the Tech-Cor Acquisition, Allstate and IAA
established a master salvage agreement covering salvage and reclamation services
to be provided by IAA to Allstate in certain geographic markets on an ongoing
basis (the "1993 Salvage Agreement"); and

         WHEREAS, Allstate and IAA desire to amend and supplement the terms of
the Salvage Agreement due to changes in the salvage and reclamation marketplace
as well as changes in their respective internal operations.

         NOW, THEREFORE, in consideration of the foregoing and of the covenants
and agreements herein contained, the parties hereto agree as follows:


                                    I. DEFINITIONS

    1.1. DEFINITIONS.  As used in this Revised Salvage Agreement the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

         (a)  "ACTUAL CASH VALUE" means the appraised value of each Reclamation
Vehicle as determined by an accepted industry method such as that used by
Certified Collateral Corporation ("CCC") or a mutually agreed upon comparable
system without deductible, sales tax, or license fees.

         (b)  "ADVANCE CHARGES" means with respect to any Reclamation Vehicle,
the aggregate charges for services customarily provided that are accumulated
prior to the time the Reclamation Vehicle processor takes possession of such
vehicle, including, but not limited to, advances with respect to impound or
similar initial tow charges, storage charges, costs of estimate, tear down fees,
lien sale fees, etc., provided that Advance Charges shall not include


<PAGE>

amounts payable to any State Department of Motor Vehicles (or similar authority)
relating to the transfer of title of such Reclamation Vehicle.

         (c)  "APPRAISAL FACILITY" means a facility where suspected total loss
or recovered theft vehicles are brought temporarily for damage evaluation or for
other claims services.

         (d)  "BUSINESS DAY" means each day on which banks are generally open
for business in Illinois.

         (e)  "CATASTROPHE VEHICLES" means in excess of one hundred (100) Total
Loss Vehicles damaged by a single event which is determined to be a
"catastrophe" by Allstate policy.  Common catastrophe events include hurricanes,
earthquakes, tornadoes, wind and hail storms, fires and explosions.

         (f)  "CHANGE OF CONTROL" means such time as either (i) any "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended) engaged directly or indirectly in the
insurance business obtains "beneficial ownership" (within the meaning of Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of at
least 20% of the voting power of the voting capital stock of IAA, or (ii) any
other "person" or "group" obtains "beneficial ownership" of at least 50% of the
voting power of the voting capital stock of IAA, or (iii) IAA sells, leases or
transfers all or substantially all of its assets to any "person" or "group" in
one or more transactions.

         (g)  "COMPARABLE IAA CUSTOMER" means for any market, any other
insurance company that supplies to IAA reclamation vehicles.

         (h)  "LOSS CATEGORY" means each category of total loss and recovered
theft vehicle.

         (i)  "NEW LOCAL AGREEMENT" means any New Local Pool Agreement, New
Local Purchase Agreement or Other Local Agreement.

         (j)  "OWNER RETAINED VEHICLE" means any Total Loss Vehicle or
Recovered Theft Vehicle of which the insured or claimant wishes to retain
ownership for an agreed upon price acceptable to the insured or claimant and
Allstate.

         (k)  "POOLING METHOD" means the method of processing total loss and
recovered theft vehicles for carriers under which such vehicles are sold on a
consignment basis by the processor.

         (l)  "PROCESSED" when used solely with reference to vehicles processed
by IAA means vehicles that have been sold by IAA for which revenue has been
recognized by IAA in accordance with its accounting policies, regardless of the
method under which vehicles were processed (unless the context otherwise
requires).


                                                                               2

<PAGE>

         (m)  "PURCHASE METHOD" means the method of processing total loss and
recovered theft vehicles for carriers under which such vehicles are purchased
from the carrier by the processor.

         (n)  "RECLAMATION SERVICES" means the processing and sale by IAA of
total loss and recovered theft vehicles for carriers, whether provided under the
Purchase Method, the Pooling Method or otherwise.

         (o)  "RECLAMATION VEHICLES" means, collectively, Total Loss Vehicles
and Recovered Theft Vehicles owned by Allstate included within all Loss
Categories, provided that the term Reclamation Vehicles shall not include any
Owner Retained Vehicles, any Catastrophe Vehicles, any vehicle parts (as defined
in any local market salvage purchase agreement) or any other vehicles not made
available to IAA by Allstate.

         (p)  "RECOVERED THEFT VEHICLE" means any vehicle which was stolen and
recovered, and the ownership of which has been transferred to Allstate.

         (q)  "SALEABLE TITLE DOCUMENTS" means all forms and documents, without
error, omission, lien or other encumbrance, that allow for the immediate
initiation and ultimate conclusion of the title transfer process.

         (r)  "TECH-COR FACILITIES" means the vehicle reclamation operations
located in Wheeling, Illinois; Markham, Illinois; Romulus, Michigan; 
Glassboro, New Jersey and Carteret, New Jersey, which were acquired by IAA in
the Tech-Cor Acquistion.

         (s)  "TERM" means the period commencing on the date of this Revised
Salvage Agreement and ending upon the expiration of the Initial Term and any
successive Additional Term or any earlier date on which this Revised Salvage
Agreement is terminated pursuant to Article VI.

         (t)  "TOTAL LOSS VEHICLE" means (i) any vehicle which has been
wrecked, destroyed, stripped, burned, submerged in water or otherwise damaged to
such an extent that Allstate considers it uneconomical to repair the vehicle or
(ii) any such vehicle which may be economical to repair but which Allstate
designates as a Total Loss Vehicle because in the opinion of Allstate it is not
feasible to repair the vehicle.

         (u)  "VIC" means any temporary storage, towing and/or appraisal
facility of the type commonly referred to in the insurance industry as a
"vehicle inspection center" to which suspected Total Loss Vehicles are brought.


                                                                               3

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                      II. SCOPE OF SALVAGE ARRANGEMENTS

    2.1. IAA SERVICES IN NEW MARKETS.

         (a)  During the Term, IAA shall be Allstate's preferred provider of 
Total Loss and Recovered Theft vehicle Reclamation Services in respect of 
Reclamation Vehicles and Castastrophe Vehicles in each market in which IAA 
provides Reclamation Services.  [*] Allstate agrees to inform its local field 
management as to the terms of this Revised Salvage Agreement with IAA, 
including without limitation that IAA is Allstate's preferred provider of 
reclamation services hereunder, [*].  In addition, Allstate will assist IAA 
in setting up meetings/presentations with the appropriate field management 
and assist both the local Allstate Management and IAA personnel in helping to 
resolve any conflicts or problems that may arise.

         (b)  During the Term, IAA shall be entitled to bid on all Owner
Retained Vehicles when (i) IAA provides Allstate with Reclamation Services in
the market in which the Owner Retained Vehicle is located and (ii) Allstate's
request of IAA for a bid on the Owner Retained Vehicle does not unreasonably
delay or interfere with Allstate's claim settlement process.  Allstate agrees to
discuss with its field offices the operational procedures required to properly
implement this agreement, including the procedures for processing Owner Retained
Vehicles and calculating Actual Cash Values.

    2.2. EXPANSION OF RECLAMATION SERVICES.

              This Section deleted.

    2.3. CONVERSION TO PURCHASE METHOD.

              This Section deleted.

    2.4. LOCAL AGREEMENTS.

              This Section deleted.

    2.5. PAYMENT TERMS.

              This Section deleted.


*Confidential treatment granted.


                                                                               4

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    2.6. EXISTING LOCAL POOLING AGREEMENTS.

         (a)  IAA and Allstate are currently parties to certain salvage pool
agreements (collectively, the "EXISTING LOCAL POOL AGREEMENTS," which term shall
include any subsequent amendment thereto).

         (b)  Notwithstanding Section 6.1 of this Revised Salvage Agreement,
the Existing Local Pool Agreements for the following Tech-Cor Facilities 
shall receive the [*] pricing terms provided for in Section 2.8(b) 
commencing as of the following dates, and may be terminated by either party 
on or after the following dates upon at least [*] advance notice: (i) [*], 
and (ii) [*].

         (c)  Following termination of an Existing Local Pool Agreement,
Allstate may enter into a New Local Agreement with IAA under the terms of
Section 2.8, 2.9 or 2.10 hereof.

    2.7. EXISTING LOCAL PURCHASE AGREEMENTS.

         (a)  IAA and Allstate are currently parties to certain salvage
purchase agreements (collectively, the "EXITING LOCAL PURCHASE AGREEMENTS")
which term shall include any subsequent amendment thereto).

         (b)  Notwithstanding the terms of Section 6.1 of this Revised Salvage
Agreement or prior agreed upon termination dates, Existing Local Purchase
Agreements in the following markets shall, on the dates referenced below, 
receive the favorable pricing terms provided for in Section 2.9(c) and may be 
terminated by either party on or after the dates referenced below upon at 
least [*] advance notice: (i) [*], however, each such local Allstate 
market has the option to extend the Existing Local Purchase Agreement through 
[*] if it notifies IAA by [*]; (ii) [*]; (iii) [*]; (iv) [*].

         (c)  On [*], the price paid for Reclamation Vehicles by IAA will be 
increased by [*] in [*] and by [*] in [*].

         (d)  For a Reclamation Vehicle being sold under a Percentage-of-Sale
basis under an Existing Local Purchase Agreement, IAA shall, once it has
obtained Saleable Title Documents with respect to such vehicle, offer such
vehicle for sale at or before the third auction at the site at which such
vehicle is located.

*Confidential treatment granted.
                                                                               5

<PAGE>

         (e) Following termination, Allstate may enter into a New Local
Agreement with IAA under the terms of Section 2.8, Section 2.9 or Section 2.10
hereof.  Any such New Local Agreement shall terminate on such a date as is
agreed to by the parties.

         (f) Notwithstanding the foregoing, if after June 30, 1995 there has
occurred any changes in the laws or regulations or implementation of laws or
regulations applicable to any local market that affect the prices paid for
Reclamation Vehicles, either party may, upon [*] notice, elect to change the
Local Purchase Agreement covering such market into a New Local Agreement, with
the Reclamation Vehicles covered thereby to be processed under (i) the Pooling
Method upon pricing terms and other terms established in accordance with Section
2.8(a) hereof, (ii), if the local Allstate management agrees, under another
mutually-acceptable method of sale pursuant to Section 2.10 hereof, or (iii), if
the local Allstate management agrees, under a mutually-acceptable New Local
Purchase Agreement pursuant to Section 2.9; provided, however, that Allstate
may, upon notice to IAA within such [*] period, elect to have such Local
Purchase Agreement terminate at the end of such [*] period and to not have a
New Local Agreement become effective in its place.

         (g) Notwithstanding anything to the contrary in this Agreement, IAA 
shall also have the right to terminate the Existing Local Purchase Agreements 
covering [*] on or after [*] upon [*] advance written notice (such 
termination right of IAA referred to herein as the "Buyout Right").  At the 
end of such [*] period following notice of exercise of the Buyout Right, IAA 
shall pay to Allstate or one or more affiliates of Allstate designated by 
Allstate the Buyout Amount (as defined below).  During such [*] period, IAA 
and each of the affected Allstate local offices shall discuss whether, upon 
mutual agreement, to convert the affected Existing Local Purchase Agreement 
into a New Local Agreement in accordance with Sections 2.8, 2.9, or 2.10 
hereof, and, failing such mutual agreement, any such Existing Local Purchase 
Agreement not so converted shall immediately terminate at the end of such [*] 
period.  Upon IAA's election to exercise the Buyout Right, Allstate may cease 
to characterize IAA as a "Preferred Provider" hereunder and Allstate's 
obligations under [*] Section 2.1(a) hereof shall immediately terminate.  IAA 
may not exercise the Buyout Right with respect to some but not all of the 
Existing Local Purchase Agreements listed above.  (As used herein, the 
"Buyout Amount" shall equal (i) [*] plus (ii), if a New Local Agreement is 
not established pursuant to this Section 2.7(f) for one or more of such 
Allstate local offices, the Utilization Fee Present Value (as defined below). 
The "Utilization Fee Present Value" shall [*].

*Confidential treatment granted.
                                                                               6

<PAGE>

    2.8. NEW LOCAL POOLING AGREEMENTS.

         (a)  In the event IAA establishes Reclamation Services  to Allstate in
a new market which are provided under the Pooling Method, Allstate and IAA shall
enter into a contract relating to the provision of Reclamation Services to
Allstate under the Pooling Method (each, a "NEW LOCAL POOLING AGREEMENT").

         (b)  The terms of any such New Local Pooling Agreement shall be
negotiated in good faith between IAA and Allstate's local field management, and
such terms shall be based on an objective of providing to Allstate a total cost
for processing Reclamation Vehicles supplied to IAA under such New Local Pooling
Agreement [*].  To assist the parties in determining such terms, IAA
shall provide to such local field management and Tech-Cor Management negotiating
any such new Local Pooling Agreement a schedule of [*].

         (c)  Allstate and IAA agree to review the payment terms contemplated
by this Section 2.8 upon the implementation of electronic transfer of funds
arrangements between Allstate and IAA.  For those Reclamation Vehicles being
sold under Local Pooling Agreements, IAA shall not decline to accept a bid for a
vehicle without Allstate's prior approval.  Once IAA has obtained Saleable Title
Documents with respect to a vehicle covered by a Local Pooling Agreement, IAA
shall offer such vehicle for sale at or before the third auction at the site at
which such vehicle is located.

    2.9. NEW LOCAL PURCHASE AGREEMENT.

         (a)  In the event IAA establishes Reclamation Services for Allstate in
a new market which are provided under the Purchase Method, Allstate and IAA
shall enter into a contract relating to the provision of Reclamation Services to
Allstate under the Purchase Method (each, a "NEW LOCAL PURCHASE AGREEMENT").

         (b)  Allstate and IAA agree to review the payment terms contemplated
by this Section 2.9 upon implementation of electronic transfer of funds
arrangements between Allstate and IAA.

         (c)  The terms of any such New Local Purchase Agreement shall be
negotiated in good faith between IAA and Allstate's local field management,
[*]

*Confidential treatment granted.
                                                                               7
<PAGE>

[*]  For a Reclamation Vehicle being sold under a Percentage-of-Sale basis 
under a New Local Purchase Agreement, IAA shall, once it has obtained 
Saleable Title Documents with respect to such vehicle, offer such vehicle for 
sale at or before the third auction at the site at which such vehicle is 
located.

         (d)  Notwithstanding the foregoing, if there subsequently occurs any
changes in the laws or regulations or implementation of laws or regulations
applicable to such market that affect the prices paid for Reclamation Vehicles,
either party may, upon [*] notice, elect to change such Purchase Agreement
into a New Local Pooling Agreement, New Local Purchase Agreement, or New Other
Local Agreement in accordance with Section 2.7(e) above.

    2.10. OTHER LOCAL AGREEMENTS.

         (a)  In the event IAA establishes Reclamation Services for Allstate in
a new market which are provided under a method other than the Purchase Method or
the Pooling Method, Allstate and IAA shall enter into a contract (each, an
"OTHER LOCAL AGREEMENT").

         (b)  The terms of any such Other Local Agreement shall be negotiated
in good faith between IAA and Allstate's local field management, taking into
account the total economic return that IAA provides under such Other Local
Agreements to Comparable IAA Customers in such market.  IAA agrees to keep
Tech-Cor Management apprised of such negotiations.  Any such New Other Local
Agreement shall provide that IAA must pay to Allstate all required payments with
respect to each vehicle sold under such New Other Local Agreement within [*] 
following IAA's receipt of such funds from the purchaser of such vehicle.  In 
addition, any such New Other Local Agreement shall also provide that (x) IAA 
will not decline to accept a bid for a vehicle being sold under such 
agreement without Allstate's prior approval, and (y), once IAA has obtained 
Saleable Title Documents with respect to a vehicle covered by such agreement, 
IAA shall offer such vehicle for sale at or before the third auction at the 
site at which such vehicle is located.

    2.11. WITHDRAWAL FROM MARKETS.  Notwithstanding any provision of this
Agreement, IAA retains the right to withdraw at any time upon [*] notice to
Allstate from one or more of those existing markets identified on Exhibit 2.11
attached hereto in which IAA currently provides Reclamation Services or from any
new markets in which it provides Reclamation Services in the future.

*Confidential treatment granted.
                                                                               8

<PAGE>

    2.12. AMENDMENTS.  The terms of any Existing Local Agreement or New Local
Agreement shall be subject to amendment upon the mutual agreement of IAA and the
local field management of Allstate managing such local agreement to better meet
the needs of the local markets.  IAA agrees to notify Allstate's National
Salvage Account Manager of any such amendment prior to its effectiveness.

                 III.  PAYMENT TERMS FOR LOCAL AGREEMENTS

    3.1. MARKET AREA BASELINE RETURN.

              This Section deleted.

    3.2. PURCHASE PRICES FOR NEW LOCAL PURCHASE AGREEMENTS.

              This Section deleted.

    3.3. COMPARISON OF CALCULATED RETURN AND TARGET NET RETURN.

              This Section deleted.

    3.4. ADJUSTMENTS TO GUARANTEE MULTIPLIER.

              This Section deleted.

    3.5. PAYMENT TERMS FOR EXISTING MARKET AREAS.

              This Section deleted.

    3.6. RENEGOTIATION OF PRICING.

              This Section deleted.

    3.7. VOLUME PRICING ADJUSTMENT. Allstate shall have the option to either:

         (a)  engage, at Allstate's expense, an independent third party to
verify the compliance by IAA with the provisions of Sections 2.8, 2.9 and 2.10
with regard to its pricing and fees to its other customers, and IAA shall
provide information to, and otherwise cooperate with, such third party as
reasonably requested; provided that such third party (i) may be required by IAA
to execute a confidentiality agreement with IAA in form reasonably acceptable to
IAA and (ii) shall not be permitted to remove any IAA records, or any copies
thereof, from IAA facilities.  Allstate shall have no right to conduct such
verifications more frequently than twice during any calendar year; or


                                                                               9

<PAGE>

         (b) request and receive written confirmation from IAA verifying its
compliance with Sections 2.8, 2.9 and 2.10 signed by its President.  For
purposes of this Section, contract negotiations are excluded from the definition
of "verification."

    3.8.  TITLE AND STORAGE CHARGES.

              This Section deleted.

    3.9.  REVIEW OF CALCULATIONS.

              IAA shall have the right to reasonably request ACV data which
Allstate uses to calculate IAA payments.

    3.10. PURCHASE PRICE FOR CERTAIN VEHICLES.

              This Section deleted.


                                  IV. UTILIZATION FEE

    4.1.  UTILIZATION FEE.

         (a)  During calendar years 1996 and 1997, IAA will pay to Allstate (or
its designee) a fee in respect of each Reclamation Vehicle sold by IAA during
each such year.  The amount of the per vehicle fee shall be [*]  The aggregate
fee payable for each calendar year pursuant to this Section 4.1 (the
"UTILIZATION FEE") shall be an amount equal to the product of (x) the total
number of Reclamation Vehicles sold by IAA during such calendar year and (y)
[*]

         (b)  Within [*] after the end of each of the first three quarters of 
each calendar year, IAA shall pay to Allstate (or its designee) [*] of the 
estimated Utilization Fee for such calendar year, based on a reasonable 
estimate by IAA of the annual volume of Reclamation Vehicles to be processed 
by IAA during such year.  Within [*] after the end of each calendar year, the 
Utilization Fee for such year shall be calculated and (i) if the aggregate 
estimated amounts previously paid to Allstate (or its designee) are less than 
the Utilization Fee, the amount of such shortfall shall be paid to Allstate 
(or its designee); or (ii) if the aggregate estimated amounts previously paid 
by IAA to Allstate (or its designee) exceed the Utilization Fee, the amount 
of such excess shall be paid by Allstate (or its designee) to IAA.

         (c)  No Utilization Fee was or is payable by IAA to Allstate during
the third and fourth quarters of 1995.  Utilization Fees paid by IAA in the
first and second quarters of 1995 will not be subject to adjustment and will be
retained by Allstate.

    4.2. VOLUME COMPONENT.

         This Section deleted.

*Confidential treatment granted.
                                                                              10

<PAGE>

    4.3. PROFIT COMPONENT.

         This Section deleted.

    4.4. ROLL-OUT COMPONENT.

         This Section deleted.


                           V.  OTHER OPERATING ARRANGEMENTS

    5.1. VEHICLE INSPECTION AND APPRAISAL FACILITIES.

         (a)  At the request of Allstate, IAA shall provide reasonable space to
Allstate at any facility where IAA provides Reclamation Services for use by
Allstate or any of its affiliates as a VIC.

         (b)  IAA will lease to Allstate the VICs currently located at the
Tech-Cor Facilities at the existing rates applicable to such leases and the VICs
currently located at IAA facilities at the existing rates.  For those VICs
located at a new IAA facility, Allstate will pay its pro rata share (based on
square footage) of any rent and other operating costs payable by IAA in respect
of such facility.

         (c)  If Allstate or any of its affiliates subsequently chooses to
offer appraisal services at a reclamation facility in a market serviced by IAA,
Allstate will offer such services at an Appraisal Facility located at an IAA
facility, if IAA has space available at its facility in such area.  Allstate and
its affiliates will have the first right to use any space at an IAA facility
designated by IAA as an Appraisal Facility.

         (d)  IAA will continue during the Term to make available to Allstate 
the space currently used for Appraisal Facilities at the Tech-Cor Facilities
[*]  For Appraisal Facilities located at new IAA facilities, Allstate shall 
pay to IAA an amount equal to a proportionate share of IAA's total costs to 
maintain such facility or, if less, an amount equal to the fair market rental 
for such Appraisal Facility.

         (e)  Any space provided to Allstate for use as a VIC pursuant to this
Section 5.1 shall be provided on terms substantially similar to those set forth
in the relevant Form of Sublease attached as Exhibit 5.1(e).

    5.2. OTHER BUSINESS INTERESTS.

         (a)  Prior to IAA's entering into [*] ("New Business"), IAA shall 
notify Allstate of such intended plans and offer to Allstate the opportunity 
to participate with IAA in such New Business. If Allstate notifies IAA within 
sixty (60) days of Allstate's receipt of any such written notice from IAA 
that Allstate desires to so participate, IAA and Allstate shall negotiate in 
good faith with respect to a role for Allstate to provide equity or debt 
financing, management resources or other resources to such New Business or to 
enter into a joint venture or revenue sharing arrangement with respect to 
such New Business. In such negotiations, the parties shall take into account, 
among other things, the following:

             (i)   The enhanced market position of IAA's automobile salvage 
reclamation business resulting from the Tech-Cor Acquisition and the relative 
importance, if any, of this enhanced market position to such new Business;

             (ii)  Allstate's position, relative to other suppliers of 
vehicles to IAA, as a provider of salvage vehicles to IAA;

             (iii) Market entry support that Allstate may be able to provide 
relative to such New Business;

             (iv)  Allstate's value as a potential purchaser or customer of 
the new services or products of such New Business; and

             (v)   Allstate's relative contributions to such New Business in 
terms of concept, business plan design, strategy development, resource 
contribution and implementation.

         (b) If such an agreement is entered into by Allstate and IAA, 
Allstate's pricing for the new products or services from the New Business 
will reflect Allstate's contributions in the design and development of the 
New Business and in the position of IAA for industry and market entry and 
will provide for preferred customer status for Allstate based on Allstate's 
value as the launching customer and Allstate's projected purchase volume.

         (c) If Allstate and IAA fail to reach agreement on any such role for 
Allstate in connection with such a New Business within [*] following 
commencement of negotiations, IAA shall have no obligation to provide a role 
to Allstate in conjunction with such New Business.

*Confidential treatment granted.
                                                                              11

<PAGE>

    5.3. SALVAGE MANAGEMENT SYSTEM.

         (a)  Allstate may develop, either on its own or with the assistance of
a third party, a salvage management system to meet Allstate's requirements with
regard to functionality, interfaces with existing and future claim systems,
industry, state and federal reporting, vehicle salvage related analysis, and
report generation (the "PROPOSED SALVAGE MANAGEMENT SYSTEM").

         (b)  IAA shall contribute [*] toward the cost of designing and
developing the Proposed Salvage Management System, which amount shall be payable
on or before December 31, 1996.

         (c)  Allstate shall be the owner of the Proposed Salvage Management
System and shall determine the location of the hardware and software comprising
the Proposed Salvage

*Confidential treatment granted.
                                                                              12

<PAGE>

Management System.  The licensing of the Proposed Salvage Management System to
any third party will be at Allstate's discretion and any fees generated
therefrom shall be paid to Allstate. The identity of the licensee, the scope of
the license and the amount of this licensing fee will be determined by Allstate
in its sole discretion.  Notwithstanding the foregoing, [*]

         (d)  All communication and transaction costs related to the Salvage
Management System will be the responsibility of the originating party.

                           VI.  TERM; RENEWAL; TERMINATION

    6.1. TERM.  The term of this Revised Salvage Agreement (the "INITIAL TERM")
shall expire on December 31, 1998, unless terminated earlier pursuant to the
provisions of this Article VI.

    6.2. ADDITIONAL TERM.

         (a)  Allstate has the option to extend the term of this Revised
Salvage Agreement for successive one year periods (each an "ADDITIONAL TERM")
upon [*] written notice to IAA.

         (b)  Allstate shall have the right to terminate this Revised Salvage
Agreement without cause during any Additional Term upon [*] written notice 
to IAA.

    6.3. EARLY TERMINATION BY ALLSTATE.  Upon [*] written notice to IAA, 
Allstate shall have the right to terminate this Revised Salvage Agreement, 
any Existing Local Agreement or any New Local Agreement, covering any market 
in which IAA commits a breach of the performance standards set forth in the 
applicable Agreement.

    6.4. EARLY TERMINATION BY EITHER PARTY.  Either party shall have the right
to terminate this Revised Salvage Agreement and any Existing Local Agreements or
New Local Agreements at any time:

         (a)  immediately upon notice to the other party in the event that the
other party is in default of a monetary obligation under this Revised Salvage
Agreement, any Existing Local Agreement or New Local Agreement which remains
uncured for [*] after notice thereof to the defaulting party;

         (b)  immediately upon notice to the other party in the event that the
other party in the event that the other party is in default of any material
non-monetary obligation under this Revised Salvage Agreement, any Existing Local
Agreement or any New Local Agreement which remains uncured for [*] after notice 
thereof to the defaulting party;

         (c)  In the event that there is a Change of Control of IAA; or

*Confidential treatment granted.
                                                                              13

<PAGE>

         (d)  In the case of any New Local Agreement established after April 1,
1996, upon thirty (30) days notice from one party to the other.

    6.5. AMOUNTS OWED AT EXPIRATION OF TERM.  The expiration of the Term shall
not affect the payment of any amounts owed hereunder or under any Existing Local
Agreement or  New Local Agreement at such expiration or in respect of periods
prior to such expiration.


                                 VII.  NONCOMPETITION

    7.1. AGREEMENT NOT TO COMPETE.

         (a)  Allstate shall not, and shall cause each of its Subsidiaries not
to, directly or indirectly, anywhere within any of the market areas serviced by
the Tech-Cor Facilities acquired by IAA engage directly in, permit Allstate's or
any or its Subsidiaries' names to be used by, or otherwise compete directly with
IAA in, the business of providing reclamation services with respect to Total
Loss Vehicles of Recovered Theft Vehicles (the "COMPETITIVE BUSINESS"); PROVIDED
that the Competitive Business shall not include any claims training, research
and appraisal operations or services and that this Section shall not prohibit
Allstate or any of its Subsidiaries from:

              (i)  acquiring, after the date hereof, any firm, partnership,
trust, corporation, or a division or business unit thereof, or any other entity
engaged directly in the Competitive Business (an "ACQUIRED COMPETITIVE
BUSINESS") if (A) the acquisition of the Acquired Competitive Business is
incidental to the acquisition of a firm, partnership, trust, corporation or
other entity not engaged in the Competitive Business and (B) Allstate shall take
all reasonable steps to dispose, as promptly as practicable after such
acquisition, of such Acquired Competitive Business; or

              (ii) the passive ownership, directly or indirectly, of less than
fifty percent (50%) of the ownership interest in any firm, partnership, trust,
corporation, or a division or business unit thereof, or any other entity engaged
in the Competitive Business.

         (b)  If any court of competent jurisdiction shall finally hold that
the time, territory or any other provision set forth in this Section 7.1
constitutes an unreasonable restriction, such provision shall not be rendered
void, but shall apply as to such time, territory or to such other extent as such
court may determine constitutes a reasonable restriction under the circumstances
involved.  Allstate acknowledges that the restrictions contained in this Section
7.1 are reasonable and necessary to protect the legitimate interests of IAA and
that any breach by Allstate of any provision hereof will result in irreparable
injury to IAA.  Allstate acknowledges that, in addition to all remedies
available at law, IAA shall be entitled to equitable relief, including
injunctive relief.  Without limitation, the parties agree and intend that the
covenants contained in this Section 7.1 shall be deemed to be a series of
separate covenants and agreements, one for each and every county or political
subdivision of each state of the United


                                                                              14

<PAGE>

States.  If, in any judicial proceeding, a court shall refuse to enforce in such
action any of the separate covenants deemed included herein, then at the option
of IAA, wholly-unenforceable covenants or components thereof shall be deemed
eliminated from the provisions hereof for the purpose of such proceeding to the
extent necessary to permit the remaining separate covenants to be enforced in
such a proceeding.  The parties intend to have covenants enforceable to the
fullest extent of the law as to scope, time and geography.

         (c)  Allstate's obligations under this Section 7.1 shall terminate on
the earlier of (i) expiration of the Initial Term or (ii) in the event Allstate
notifies IAA of its election to terminate this Agreement pursuant to Sections
6.3 or 6.4 on the actual termination date of this Agreement.


                           VIII.  MISCELLANEOUS PROVISIONS

    8.1. NOTICES.  All notices, statements, demands, consents or approvals or
other communications (collectively, "NOTICES") required or permitted to be given
to a party under or pursuant to this Revised Salvage Agreement shall be in
writing and shall be delivered in person or by certified mail, return receipt
requested, or by commercial messenger or courier service, addressed to such
party as provided below:

         If to Allstate:     Allstate Insurance Company
                             2775 Sanders Road, Suite A8
                             Northbrook, Illinois 60062
                             Attn: Susan L. Lees
                                   Associate Counsel

         with copies to: Allstate Insurance Company

         2775 Sanders Road, Suite B7
         Northbrook, Illinois 60062
         Attn: Vice President Property
               Claims Service Organization

         Allstate Insurance Company
         2775 Sanders Road, Suite A6
         Northbrook, Illinois 60062
         Attn:  Auto Claims Director

         Tech-Cor, Inc.
         100 East Palatine Road
         Wheeling, Illinois 60090
         Attn:  President


                                                                              15

<PAGE>

         If to IAA:     Insurance Auto Auctions, Inc.
                        1270 West Northwest Hwy.
                        Palantine, IL 60067
                        Attn: Bradley S. Scott, Chairman
                              James Alampi, President
                              William W. Liebeck, Executive
                              Vice President

         with a copy to:       Gunderson, Dettmer, Stough,
                               Villeneuve, Franklin & Hachigian, LLP
                               600 Hansen Way, Second Floor
                               Palo Alto, CA 94304
                               Attn:  Scott C. Dettmer, Esq.

Any party may from time to time change its address or the addresses for receipt
of Notices by giving the other parties prior notice of such change in the manner
hereinabove provided.  All Notices received on a Business Day before 3:00 p.m.
local time shall be deemed delivered on such day.  All Notices received either
(i) after 3:00 p.m. on a Business Day or (ii) on a day that is not a Business
Day shall be deemed delivered on the next Business Day.

    8.2. RELATIONSHIP OF PARTIES.  Nothing contained herein shall create or be
deemed to create any relationship of agency, partnership, joint venture or
employment among the parties hereto and no party hereto shall have any power to
obligate or to bind the other party hereto in any manner whatsoever.

    8.3. SPECIFIC PERFORMANCE.  The failure or refusal by a party to comply
with any or all of the provisions of this Revised Salvage Agreement shall
entitle the other parties to specific performance of any or all of the terms,
covenants and conditions of this Revised Salvage Agreement in addition to any
and all other remedies available to the other party at law or in equity.

    8.4. ATTORNEY'S FEE.  In the event of any litigation between the parties
hereto to enforce or interpret any provision or right hereunder, the
unsuccessful party to such litigation shall pay the successful party all costs
and expenses reasonably incurred, including reasonable attorneys' fees (in the
case of staff counsel determined at a market rate) and disbursements.

    8.5. ASSIGNMENT.  This Revised Salvage Agreement may not be directly or
indirectly assigned or transferred by either party hereto without the prior
written consent of the other party.

    8.6. SUCCESSORS AND ASSIGNS.  This Revised Salvage  Agreement is for the
sole benefit of Allstate and IAA and their respective nominees, successors and
permitted assigns.  This Revised Salvage Agreement shall not confer any rights
or benefits or any person other than Allstate and IAA and their respective
nominees, successors and permitted assigns.

    8.7. FURTHER ASSURANCES.  Each party shall at any time and from time to
time execute, acknowledge and deliver all such further documents and instruments
and do such further acts and


                                                                              16

<PAGE>

things as the other parties may reasonably request to carry out and effectuate
fully the transactions contemplated by this Revised Salvage Agreement.

    8.8. HEADINGS.  All article and section headings in this Revised Salvage
Agreement are for convenience of reference only.  Such titles and captions shall
not be deemed part of this Revised Salvage Agreement and in no way defined,
extend or describe the scope or intent of any provisions hereof.

    8.9. GOVERNING LAW.  This Revised Salvage Agreement shall be governed by
and construed in accordance with the substantive laws of the State of Illinois,
without regard to the conflicts of law principles thereof.

    8.10. COUNTERPARTS.  This Revised Salvage Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original.  Such
counterparts shall together constitute one and the same Revised Salvage
Agreement even if all the parties shall not have signed the same counterpart.

    8.11. ENTIRE REVISED SALVAGE AGREEMENT.  This Revised Salvage Agreement
(together with the Exhibits hereto) constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes any and all
prior agreements, understandings or proposals with respect to such subject
matter, including without limitation the 1993 Salvage Agreement.  No amendment
or modification of this Revised Salvage Agreement shall be binding unless same
shall be in writing and signed by each of Allstate and IAA.

    8.12. CONFIDENTIALITY.

         (a)  Without the prior written consent of the other party, no party
shall disclose to any third party, or make any announcement regarding, any of
the terms of this Revised Salvage Agreement, unless such disclosure is (i)
required by law and the party making such disclosure shall have previously
notified the other party of its legal obligation to make such disclosure or (ii)
made pursuant to reporting obligations under applicable securities laws and
regulations.

         (b)  The provisions of (a) above shall not apply to the disclosure of
any information (i) to professional advisors of either party (such as lawyers or
accountants) who are advised by the party of the confidential nature of the
information, (ii) which has already come into the public domain other than by
reason of default by the applicable party bound hereby, (iii) rightfully
received from any third party or (iv) necessary to establish either party's
rights hereunder.

         (c)  Nothing in this Revised Salvage Agreement shall be construed to
provide Allstate any license, rights, or access to any confidential information
of any supplier to IAA.


                                                                              17

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Revised
Salvage Agreement to be executed by their duly authorized representatives as of
the date first above written.

                                  ALLSTATE INSURANCE COMPANY



                                  By:  /s/ William J. Gruner   4/30/96
                                      ---------------------------------------
                                  Its:


                                  INSURANCE AUTO AUCTIONS, INC.



                                  By:  /s/ James P. Alampi   5/1/96
                                      ---------------------------------------
                                  Its: 


                                                                              18

<PAGE>
                                    EXHIBIT 1.1(v)


                                 MAPS OF MARKET AREAS


See separately bound document entitled "Tactician Maps Of Allstate
Regions - Market Claim Office Territories By Zip Codes"


                                                                              19

<PAGE>

                                     EXHIBIT 2.9

                             ECONOMIC RETURN METHODOLOGY


[*]

*Confidential treatment granted.
                                                                              20

<PAGE>

                                     EXHIBIT 2.11

                               WITHDRAWAL FROM MARKETS


[*]

*Confidential treatment granted.
                                                                              21