Practice Test Geeks(CALA) Certified Automotive Loss Adjuster Practice Test
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Total Loss Valuation Flashcards

7 cards from real CALA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Total Loss Valuation flashcards as text

  1. Under the total loss threshold (TLT) method, a vehicle is declared a total loss when:

    Answer: The repair cost equals or exceeds a fixed percentage of ACV set by state law or insurer policy

    The TLT method declares a total loss when repair costs reach or exceed a defined percentage of ACV, which varies by state.

  2. A vehicle is declared a total loss. The owner wants to retain the salvage. How does this typically affect the settlement?

    Answer: The salvage value is deducted from the ACV settlement

    When an owner retains salvage, the insurer deducts the salvage value from the ACV payout, as the insurer no longer takes title to the wreck.

  3. Which entity commonly provides electronic databases of comparable vehicle listings used by adjusters to calculate ACV?

    Answer: CCC Intelligent Solutions, Mitchell, or Audatex

    Third-party valuation platforms like CCC, Mitchell, and Audatex aggregate market listings and provide ACV reports used by adjusters.

  4. An adjuster is valuing a vehicle with aftermarket alloy wheels. How should legitimate aftermarket improvements generally be treated?

    Answer: Added to ACV if they demonstrably increase market value

    Aftermarket improvements that enhance market value should be added to ACV to the extent they are reflected in what buyers would actually pay.

  5. What is 'diminished value' in the context of total loss claims?

    Answer: The difference between pre-loss ACV and post-repair ACV due to stigma

    Diminished value is the reduction in market value a vehicle suffers because of its accident history, even after complete repairs.

  6. A total loss vehicle is subject to a $500 deductible. The ACV is $9,000 and salvage is valued at $1,500. The insured retains salvage. What is the net settlement?

    Answer: $7,000

    Settlement = ACV ($9,000) minus deductible ($500) minus salvage retained ($1,500) = $7,000.

  7. Why is the 'total loss formula' (repair cost + salvage value ≥ ACV) used in some states?

    Answer: To determine total loss when combined costs make repair economically unsound

    The total loss formula declares a vehicle a total loss when the sum of repair costs and salvage value meets or exceeds ACV, meaning repair is not economically justified.