How Do Motorcycle Insurance Companies Calculate Total Loss Value?

When the insurance company has told you your bike is a total loss, you may ask, “How do motorcycle insurance companies calculate total loss value?” Insurance companies generally use the motorcycle’s Actual Cash Value (ACV) method, which is the cost to replace the damaged motorcycle with a similar one, minus depreciation.

If you or a loved one has been injured in a motorcycle accident due to the recklessness of another person, the motorcycle accident attorneys at The Kryder Law Group, LLC Accident and Injury Lawyers can help. In the case of a totaled bike, we help determine fair ACV and advocate for compensation, covering medical expenses, lost wages, and other damages.

If you have not suffered injuries due to someone else’s negligence, you may handle your insurance company claim on your own. The information in our Car Accident Property Damage How-to Guide will help.

How Is a Totaled Motorcycle Valued?

What Is Full Market Value vs. Fair Market Value?

Full market value refers to the highest price your motorcycle might fetch in the open market. On the other hand, Fair market value is the price a competent buyer would willingly pay a competent seller, both having reasonable knowledge of all pertinent facts. Fair market value is a more accurate and realistic valuation.

What’s the Difference Between Actual Cash Value and Total Loss Value?

Actual Cash Value (ACV) represents the market value of your motorcycle, after deducting depreciation. On the other hand, Total Loss Value is the amount paid out when a vehicle is considered a “total loss” after an accident.

How Is the Value of the Totaled Motorcycle Determined?

The value of a totaled motorcycle is determined using data from various sources, including values from the National Automobile Dealers Association (NADA) or Kelley Blue Book.

It also takes into account the selling price of similar models in your area.

Additionally, any recent upgrades or improvements that can be proven with receipts could positively impact the insurance company totals.

Lastly, the cost of salvage is deducted from the total value, as the insurance company typically assumes ownership of the totaled bike.

How Much Is an Insurance Company Required to Pay Out for a Totaled Motorcycle?

Insurance companies’ payout amounts for totaled motorcycles are regulated by state insurance departments. The Illinois Department of Insurance that oversees these operations. They ensure that insurance companies follow the Actual Cash Value method for calculating total loss payments, maintaining fairness and consistency.

What is the Cutoff Value for Repair?

The cutoff value for repair refers to a threshold property damage amount set by insurance companies, beyond which a vehicle is deemed a total loss. For instance, if repair costs exceed 70% of the vehicle’s pre-accident value, the motorcycle may be considered totaled.

How Do I Know if I Am Being Offered a Fair Settlement?

To determine if you are being offered a fair settlement in a property damage claim, compare the insurance company’s valuation with your motorcycle’s Fair Market Value. For instance, if similar models in your area are selling for $8000 and your settlement offer is $6000, you may want to negotiate.

Can the Repair Shop Install Used Aftermarket Parts to Repair My Motorcycle?

Yes, repair shops can install used parts to repair your motorcycle, given they are in good condition and compatible.

Can I Negotiate the Total Loss Value of My Motorcycle?

Yes, you can negotiate the total loss value of your motorcycle. If you disagree with the insurance company’s valuation, present evidence such as receipts for recent upgrades or listings of similar models with higher prices. Your insurance adjuster may reconsider their initial offer based upon a second opinion or upon your evidence.

What Factors Affect Value of My Motorcycle?

The replacement cost of your motorcycle can be influenced by several factors:

• Age and Mileage: Motorcycles depreciate over time, and higher mileage can significantly reduce their value.
• Condition: The overall condition of your motorcycle, including mechanical and cosmetic aspects like scratches, dents, or mechanical issues can decrease the value.
• Brand and Model: Certain motorcycle brands and models have higher resale values due to their reputation for reliability, performance, or desirability.
• Modifications: Custom modifications can either increase or decrease the value of your motorcycle. While some modifications like performance upgrades might increase the value, others like unique paint jobs might decrease it due to personal taste.
• Market Demand: The demand for your specific motorcycle model in the used market can influence its value. Higher demand usually results in a higher value.
• Maintenance Records: Well-maintained motorcycles with complete service records can fetch higher prices as they indicate responsible ownership.

Who Pays the Taxes and Transfer Fees for My New Motorcycle?

When many insurance companies make settlements for totaled motorcycles, the insurance company covers taxes and transfer fees. However, the specifics can vary based on the policy. Always refer to your policy document or consult with your insurance representative for accurate information.

What If I Owe More Than My Totaled Motorcycle is Worth?

If you owe more than your totaled motorcycle is worth, you’re in a situation known as being “upside-down” or “underwater” on your loan. This is a challenging circumstance, but options like gap insurance or negotiating with lenders may offer a solution.

What Do I Do If I was Injured in My Bike Wreck?

If you have been injured in a bike wreck, some steps to take afterward would be to:

• Seek immediate medical attention if you were injured in your bike wreck.
• Inform your insurance company about the accident to initiate claim procedures.
• Consult with a personal injury attorney to understand your legal rights and how much compensation you may be able to receive.
• Maintain a record of all medical documents and expense receipts, as these may be needed for a claim settlement or legal action.

How to File a Total Loss Insurance Claim for Motorcycles

Some steps includes in the process of filing a total loss insurance claim include:

• Contact Your Insurance Provider: Report the incident to start the claim process.
• Document the Incident: Photograph damages, and note details to support your claim.
• Collect Necessary Paperwork: Gather your motorcycle’s details, receipts, and service records.
• Assess the Damage: Have a professional mechanic evaluate your motorcycle’s damage.
• Negotiate the Settlement: Discuss the fair value with your insurance company.
• Complete the Claim: Accept the settlement and finalize the claim process.

What Happens to My Motorcycle After a Total Loss Settlement?

After a total loss settlement in Illinois, your insurance company typically takes possession of the damaged motorcycle, and it’s usually sold to a salvage yard at scrap value.

If I Keep the Salvage, Can I Still Ride My Motorcycle?

If you decide to keep the salvage in Illinois, you can still ride your motorcycle provided it passes an inspection, receives a ‘rebuilt’ title, and is deemed roadworthy by authorities.

How Long Does the Total Loss Claim Process in Illinois Take?

The total loss claim process duration can vary, typically taking several weeks. The complexity of the case, speed of information exchange, and negotiation for a reasonable settlement amount can influence the time frame. Always communicate promptly with your insurer to expedite the process.

How Can a Motorcycle Accident Injury Lawyer Help Me?

If injured in a motorcycle accident due to others’ fault, motorcycle riders can get legal help from The Kryder Law Group, LLC Accident and Injury Lawyers.

We offer a free initial consultation and a no-win-no-fee commitment to ensure you receive the legal representation you deserve.