Insurance companies usually determine fair market value by referring to the “Blue Book” or a similar publication. Other sources of information are the local newspaper or the Auto Trader, which may list the for-sale price of cars of the same make, model and years as yours. Occasionally, an expert vehicle appraiser is used to help prove the value of your vehicle. You are entitled to recover the “fair market value” or the “actual cash value” of your vehicle immediately before the accident.
If you owe more money on the loan for the car than the fair market value of the car, you are “upside down” on the loan. Unfortunately, if your vehicle is a total loss, the insurance company will not pay more money to you simply because you are “upside down” with your car loan. They are only obligated to pay the “fair market value” of your car.