CAIA Total Loss Valuation 2

Question 1

A vehicle is declared a total loss when repair costs exceed what percentage of the actual cash value (ACV) in most US states?

Accepted Answer

80%

Answer

50%

Answer

70%

Answer

100%

Question 2

Which valuation method uses recent sale prices of comparable vehicles in the same geographic market to determine ACV?

Accepted Answer

Comparable sales method

Answer

Book value method

Answer

Replacement cost method

Answer

Depreciated cost method

Question 3

When adjusting a comparable vehicle's value, which factor would INCREASE the subject vehicle's ACV?

Accepted Answer

The comparable has lower mileage than the subject

Answer

The comparable has a sunroof the subject lacks

Answer

The comparable has newer tires than the subject

Answer

The comparable has a clean title while subject has a prior salvage title

Question 4

What is a 'salvage value' in the context of total loss settlement?

Accepted Answer

The amount the insurer receives by selling the wrecked vehicle

Answer

The cost to repair the vehicle to pre-loss condition

Answer

The depreciation applied to the vehicle's ACV

Answer

The owner's deductible applied at settlement

Question 5

An insured retains their totaled vehicle for parts. How does this typically affect the settlement?

Accepted Answer

The insurer deducts the salvage value from the ACV settlement

Answer

The insurer pays full ACV with no deduction

Answer

The insurer adds a storage fee to the settlement

Answer

The insurer voids the claim due to retained salvage

Question 6

Which of the following best defines 'actual cash value' (ACV) under the broad evidence rule?

Accepted Answer

Fair market value considering all relevant evidence of value

Answer

The cost to replace the vehicle with a new equivalent model

Answer

The price paid for the vehicle when originally purchased

Answer

The NADA retail value minus the deductible

Question 7

A vehicle has $12,000 in repair costs and an ACV of $14,000. The salvage value is $3,000. What is the net cost to the insurer if it declares a total loss?

Accepted Answer

$11,000

Answer

$14,000

Answer

$12,000

Answer

$9,000