To negotiate with the insurance company, you need to know how they work. They’re concerned with the pre-accident cash value of your car, sometimes called the “fair market value.” Fair market value is the price a willing buyer would pay a willing seller, when neither is being compelled to buy and/or sell, and both have reasonable knowledge about the relevant facts. When the insurance company accepts liability, this is the number they use to decide whether to offer to repair the vehicle or to total it.
When calculating repair costs versus value, insurance adjusters may use the National Automobile Dealers Association (NADA) publication, the “Official Used Car Guide,” to determine the fair market value. The NADA is published monthly and is available online at www.nadaguides.com.