An insurance company has several methods to determine the diminished value of your car. They might look at third-party resources like Kelley Blue Book and Edmunds. In addition, the insurance company might look at other, similar vehicles that have recently sold in the area. They may consider the price that you paid for the car as well as wear and tear, major repairs, and any accidents that have happened since you bought the vehicle.
Remember, they’re determining the value of your car before the accident. They don’t look at the cost to replace the vehicle or even what you paid for the vehicle when you bought it. Instead, the insurance company wants to know what your vehicle was worth on the day of the crash compared to what it’s worth now.