CALA Total Loss Valuation 3

Question 1

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

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

The salvage value is deducted from the ACV settlement

Answer

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.

Question 3

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

Accepted Answer

CCC Intelligent Solutions, Mitchell, or Audatex

Answer

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

Question 4

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

Accepted Answer

Added to ACV if they demonstrably increase market value

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

(CALA) Certified Automotive Loss Adjuster Practice Test