CVA Total Loss Evaluation & Insurance Claims

Question 1

What is the standard formula used to calculate whether a vehicle should be declared a total loss?

Accepted Answer

Repair Cost + Salvage Value ≥ ACV = Total Loss

Answer

Replacement Cost – Salvage Value = Total Loss Threshold

Answer

ACV – Deductible = Repair Authorization Limit

Answer

MSRP – Depreciation = Total Loss Value

Question 2

In most U.S. states, when must an insurance company obtain a salvage title for a totaled vehicle?

Accepted Answer

When the settlement is paid and the insurer takes ownership of the vehicle

Answer

Only if the owner requests it

Answer

After the vehicle is sold at auction

Answer

Only if the vehicle is more than 5 years old

Question 3

What is 'actual cash value' (ACV) as used in total loss insurance claims?

Accepted Answer

The fair market value of the vehicle immediately before the loss

Answer

The vehicle's original MSRP minus dealer fees

Answer

The cost to replace the vehicle with a comparable new model

Answer

The lowest price found on any online listing

Question 4

A vehicle owner disputes the insurance company's total loss settlement. What right do most state insurance regulations give the owner?

Accepted Answer

The right to an independent appraisal or appraisal umpire process

Answer

The right to demand a new vehicle of equal value

Answer

The right to retain the vehicle at no cost

Answer

The right to request a jury trial immediately

Question 5

Which of the following best defines a 'constructive total loss'?

Accepted Answer

A vehicle where repair cost does not exceed ACV but the vehicle cannot be practically repaired

Answer

A vehicle destroyed by a natural disaster such as a hurricane

Answer

A vehicle with a clean title that has been rebuilt

Answer

A vehicle totaled by a third-party liability claim

Question 6

When a vehicle owner retains a totaled vehicle, the insurer typically deducts what from the settlement?

Accepted Answer

The salvage value of the vehicle

Answer

The deductible only

Answer

The cost of the appraisal report

Answer

The remaining loan balance