Sales tax is automatically factored into all total loss settlements. Valuations are presented with the Pre-tax ACV, Post-tax ACV, and final settlement minus any applicable deductible listed in the report.

Of course diminished value is taken into account. Hardly anything automotive is worth what you originally paid for it. If you do have a vehicle which has no diminishing value (highly unlikely, it can be argued that practically everything automotive has a diminishing value), you obviously aren't insuring it through a standard insurance company.


A note on ACV:

The majority of standard (and probably many non-standard) companies use CCC to determine a vehicle's worth in the event of a total loss (either economic or obvious). CCC basically takes the person's car and factors in mileage, options, vehicle condition, etc. They then do a market research evaluation on the take prices of similar vehicles which have sold in the general vicinity of the person's residence (generally 100 or so mile radius). CCC takes all this information and coughs up the ACV. This valuation methodology is much more accurate than the famed KBB or NADA values. KBB and NADA chunk up the US into huge segments. So a car in Miami could be compared to another in Pensacola. Obviously two entirely different markets with cars selling for different amounts. CCC is more accurate to vehicle values within the local market conditions.


Charles is incorrect in saying the final decision on a total loss value via ACV is the insurance company's final decision:

If you don't agree with the value given to you by your insurance company, you do have the right to use what is called the "appraisal clause". You and the insurance company each pay for an appraiser to determine the value of the vehicle. Those appraisers agree upon a 3rd appraiser whose costs are split between you and the insurance company. This 3rd appraiser evaluates both appraisals and determines a value for the vehicle. This valuation is binding and can work for or against you.

If the appraisal is higher than originally valued by the insurance company, obviously you are better off. The insurance company is bound to offer you this value. You "win". If the appraisal is lower than originally valued, you are obviously worse off...AND since this value is binding you have to accept this offer. You "lose".


As Charles said (and this is the best piece of advise)....READ YOUR POLICY! In particular, read the section entitled "Damage to your Covered Auto". All you need to know about coverage to any sort of aftermarket parts is in there. Some policies have no coverage, others have a small cushion, while the rare few cover all aftermarket parts without the need for an endorsement.

Speaking of endorsements...if you have tons of aftermarket equipment, you should look into this. Call your agent/company and ask for more information.


One final word...if you are financing a car, make sure you have GAP coverage. I cannot tell you how many unfortunate people I deal with who are upsidedown in their vehicle and owe hundreds or THOUSANDS of dollars to the bank when their car is deemed a total loss. It only added $20/mo on my policy to add GAP coverage on my '04 Scion. Trust me when I say this...it is well worth the added expense.