If your car got totaled in an accident, only your car’s fair market value, or what is called “actual cash value” (ACV), would be paid for by your insurance company. ACV is the amount that a knowledgeable buyer is willing to pay and a knowledgeable seller is willing to accept for a vehicle comparable to yours in every respect during its pre-accident state. It takes into consideration the depreciation your car has suffered or the value of the car lost as you used it.
To determine your car’s actual cash value, your insurance company will look into its age, mileage, normal wear and tear, and unusual damages, and then make the corresponding deductions. Some companies use tools such as the Kelley Blue Book (KBB) when calculating for the ACV of a car.
If you are dissatisfied with the ACV your insurance company is offering you, you may consider negotiating it with them. To help you with coming up with a decent deal, you can ask them how your insurer calculated the ACV or do a research on cars similar to yours. Checking the KBB value of your car will also give you a good idea of how much your car is worth.