Your old car was totaled: how its actual cash value is set, and how to question it
What is a totaled car's actual cash value?
Actual cash value is what your car was worth just before the crash, not what you paid or still owe. Illinois rules make insurers set it from a regular price guide, a qualifying computer valuation, Illinois dealer comparables or two dealer quotes, and keep a record of how. Junk value is different: what the wreck is worth afterwards.
Insurers usually shorten it to ACV. The Insurance Information Institute puts it plainly: what an insurer pays on a physical damage or theft claim depends on the car's market value at the time of the loss. For a newer car that number is easy to look up. For a car with fifteen or twenty winters behind it, it's where most arguments start, and Illinois has rules that help you check the insurer's working.
How Illinois insurers must value a total loss
The rule is 50 Ill. Adm. Code 919.80(c), the Department of Insurance's standard for private passenger car claims. Once your car is declared a total loss, the insurer must send you the Department's information notice within 7 days. It can then offer a comparable replacement car from a licensed dealer, or pay cash. For a cash settlement it has to base the car's retail value on one of these:
| Method | What the rule requires of it |
|---|---|
| Printed price guide | Published at least every 2 months, with average retail, wholesale and finance values for all makes and models for at least the last 5 model years, plus major options |
| Computer valuation | Statistically valid retail values for at least 85% of makes and models over at least the last 15 model years, allowing for options, mileage and condition, drawn from at least 1.5 million vehicles and from the area where your car was mainly garaged |
| Comparable cars | At least 2 cars for sale at licensed Illinois dealers, or 2 sold by them (one within the past 30 days, one within 90), at dealers within 50 miles of the area the data comes from; names, locations and VINs go in the claim file |
| Dealer quotes | Used when your car isn't quoted in the source: at least two written dealer quotations, with the dealers' names, locations and copies of the quotes given to you |
Whichever method is used, the claim file has to show how the market value was reached. That record is what you ask for.
Why an old car is the awkward case
Look at the minimums in that table. A printed guide only has to cover the last 5 model years and a computer source the last 15; the rule asks for nothing older. A car older than the source covers may simply not be quoted, and that's when the rule's fallback applies: at least two written quotations from dealers, named and located, with copies to you.
Two old cars of the same model can also be far apart. One has 90,000 careful miles and the original paint; another has rusted rockers and a tired transmission. The notice insurers must send you (Exhibit A to Part 919) includes a worksheet listing options such as power windows, cruise control, air conditioning and rear defog, along with mileage. Go through it with your own car in mind and note anything the insurer's figure left out.
What can come off the figure, and what can't
- Condition deductions. Allowed only if they reflect a measurable drop in market value from poorer condition or earlier damage, and only if they're itemized and given a dollar amount. Deductions for wear and tear, missing parts and rust are capped at $500. The Department's notice says old, unrepaired collision damage has no such cap.
- Dealer preparation. Deductions of the "get ready to go" or "dealer prep" kind are banned outright.
- Your deductible. It comes off the payout; the worksheet in the notice subtracts it at the end. The Institute defines it as the share of a payout you're responsible for.
- Storage. If the insurer has been paying to store the wreck, it must give you reasonable notice before it stops, so you can move the car first.
Money can also come back. If you buy or lease another car within 30 days of a cash settlement and prove it within 33 days, the insurer reimburses the sales tax and the transfer and title fees, up to the amount payable on the totaled car's value.
How to question a low figure
- Ask for the working. Request the valuation report or the dealer quotes, and the list of deductions. The rule requires the insurer to document how it reached the figure.
- Check the comparables. Same maker, same year, similar body style and options. Under the comparable method they must come from licensed Illinois dealers within 50 miles, and recent sales must fall inside the 30 and 90 day windows.
- Check each deduction. Wear, rust and missing parts together can't exceed $500, and every deduction must be itemized in dollars.
- Use the 30 days. If, within 30 days of receiving the claim payment, you can't buy a comparable car for the market value set, the insurer has to reopen the file. It can pay the difference on a comparable car you've found, find one for you at its figure, offer a replacement, or settle under the appraisal section of your policy. It's excused only if, at settlement, it named a specific comparable car, VIN included, that you could have bought for its figure.
- Watch the calendar. If a claim for damage to your own car is still unresolved 40 days after you reported it, the insurer owes you a written explanation, together with a notice about the Department of Insurance.
- Ask the Department. The notice printed in the rule lists the Illinois Department of Insurance's Consumer Services Section at (866) 445-5364, with offices in Springfield and on LaSalle Street in Chicago.
Actual cash value against junk value
The insurer pays for the car as it was the moment before the loss. A junk buyer pays for the car as it is now: its metal, and whichever parts the crash spared. Those are different numbers for different situations, and most of the time you only need one of them.
When an insurer pays a total loss claim, Illinois law treats the insurer as the car's owner and the car becomes salvage, though a car 9 model years or older can stay with you if you and the insurer agree (625 ILCS 5/3-117.1). Junk value starts to matter to you in two cases:
- No cover for your own car. Collision is optional, and liability pays other people. If your policy was liability only, there may be no payout for your car at all, and the wreck's junk value is what remains.
- You keep an older car. Ask the insurer in writing how keeping it changes the settlement, then get a junk figure for the wreck before you agree. That way you're comparing two real numbers.
Flood is a comprehensive claim rather than a collision one, according to the Institute. If your car sat in water on one of the low streets studied in Midlothian's stormwater plan, that's the cover to check. For how a wreck is priced on our side, read how a junk car's value is worked out; if you're collecting more than one figure for it, how junk offers move shows how to line them up. And if the car is parked while the claim drags on, see what to do with the insurance while it waits.