Your car's value, not a standard payout.

How a California total loss is valued

The California Department of Insurance says that, unless the policy defines it otherwise, actual cash value in California means fair market value: what a knowledgeable buyer and a knowledgeable seller, neither under unusual pressure, would agree on. If your policy or endorsement sets its own valuation wording, that wording controls, so read it before a loss.

When the insurer elects a cash settlement, 10 CCR 2695.8(b) bases it on the actual cost of a comparable automobile, less your deductible. A comparable must be:

• Of like kind and quality, made by the same manufacturer, of the same model type and a similar body type
• The same model year, or newer only when there are not enough same-year comparables
• Similar in options and mileage, with differences fairly adjusted and each adjustment discernible, measurable, itemized and documented
• Available for retail purchase in the local market area within 90 calendar days of the final settlement offer, identified (when that information is available) by VIN, dealer stock or order number, or plate, plus the seller's phone number or street address

A condition deduction is allowed only when your car's documented condition is below average for its year, make and model, though prior or unrelated damage can still be deducted. The cost comes from the average of two or more local comparables from the last 90 days; if there are none, the average of two or more local dealer quotes; or a computerized valuation service that produces statistically valid local fair market values; failing those, documentation fully explained to you. The insurer must itemize and explain it in writing with the offer. The cash settlement must also include applicable taxes, one-time transfer fees, and the license fee and other annual fees for the time left on the current registration, whether or not you buy a replacement.

What I tell owners to keep: the build sheet, option receipts, service records and mileage photos, so you can question a comparable missing the options yours has.

OEM or aftermarket: what the estimate must say

On a car whose value rests on factory fit and finish, the parts on the estimate matter. California's rules:

• Equal parts only. Under 10 CCR 2695.8(g), an insurer may not require non-OEM replacement crash parts unless they are at least equal to the OEM parts in kind, quality, safety, fit and performance. The insurer must pay for any modifications needed to make the repair, must warrant that equality, and must disclose that warranty in writing in any estimate prepared by or for it. If a specified part does not comply, the insurer pays to return, remove and replace it, and it keeps primary responsibility for compliance.
• Named before repairs. Business and Professions Code 9875.1 bars an insurer from requiring non-OEM aftermarket crash parts unless you are told in a written estimate before repairs are made. The estimate must name each such part's manufacturer or distributor, and a disclosure in 10-point or larger type attached to your copy must state that any warranties on those parts come from their manufacturer or distributor, not your car's manufacturer.
• Check the invoice. The Department of Insurance says the repair invoice must identify the type of each part: used, reconditioned, rebuilt, aftermarket or OEM.
• No parts sourcing on you. Section 2695.8(h) bars an insurer from requiring you to supply replacement parts.
• Limits on betterment. Under 2695.8(i), a betterment or depreciation adjustment must be measurable, itemized, explained to you in writing, and limited to parts normally repaired or replaced during the car's useful life, such as tires or batteries. Under 2695.8(j), labor on a first-party partial loss is not depreciated unless the policy has a clear and unambiguous provision allowing it.

Before you buy, ask how the policy wording handles parts on your model. You also choose the shop; see choosing your own repair shop in California.

Official sources

• 10 CCR 2695.8, Additional Standards Applicable to Automobile Insurance (Cornell LII)
• California Business and Professions Code 9875.1
• California Vehicle Code 544, total loss salvage vehicle
• California Vehicle Code 11515, salvage certificates
• California Department of Insurance, So You've Had an Accident, What's Next?
• California Department of Insurance, Automobile Insurance Terms