California Vehicle Appraisal Resources

California's total-loss vehicle valuation requirements are established by the California Department of Insurance through the California Code of Regulations, Title 10, Chapter 5, Subchapter 7.5 — the Fair Claims Settlement Practices Regulations (10 CCR § 2695 et seq.). These regulations apply to all insurers handling automobile insurance claims in California.

Under 10 CCR § 2695.8, when a vehicle is declared a total loss, the insurer must determine the Actual Cash Value (ACV) of the vehicle. The regulations address how ACV is to be determined, including the use of comparable vehicles in the relevant market area. Adjustments for mileage, condition, and options are addressed in the regulations.

California's Fair Claims Settlement Practices Regulations address the inclusion of applicable taxes and fees in total-loss settlements. Under 10 CCR § 2695.8(b)(1), the insurer's offer of settlement for a total-loss vehicle must include applicable sales tax and applicable transfer fees. Policyholders should review the current text of § 2695.8 at the California Department of Insurance or through the California Office of Administrative Law, as regulatory text is subject to amendment.

When an insurer uses a computerized valuation system or third-party valuation service, the insurer must be able to support the valuation with comparable vehicles available in the relevant market area. California regulations require that the insurer provide the insured with a written explanation of the valuation methodology and the comparable vehicles used, upon request.

California regulations also address the insured's right to dispute a total-loss valuation. If the insured disagrees with the insurer's valuation, the insured may provide evidence of comparable vehicles or other market evidence to support a different value. The insurer must consider this evidence in good faith.

California automobile insurance policies may include an appraisal clause that provides a mechanism for resolving disputes over the amount of a loss. Whether an appraisal clause is available in a particular claim depends on the language of the applicable insurance policy. This is a policy-based right, not a statutory mandate for automobile insurance in California.

California does not have a statute that mandates an appraisal clause in automobile insurance policies. The availability of appraisal in an automobile insurance claim therefore depends primarily on whether the policy contains an appraisal provision and whether the specific dispute falls within the scope of that provision.

California's Fair Claims Settlement Practices Regulations (10 CCR § 2695 et seq.) establish standards for the handling of insurance claims, including requirements for prompt investigation, fair evaluation, and good-faith settlement. These regulations provide a framework for resolving disputes outside of formal appraisal proceedings.

Under a typical automobile insurance appraisal clause, when the insurer and the insured disagree on the amount of a loss, either party may demand appraisal. Each party selects a competent, independent appraiser. The two appraisers attempt to agree on the amount of the loss. If they cannot agree, they select an umpire. Any two of the three must agree for the appraisal award to be binding.

Questions about whether appraisal is available in a specific claim, and what the appraisal process requires under a particular policy, should be directed to a qualified attorney familiar with California insurance law.

Diminished value claims in California depend on the type of claim and the applicable policy language. California courts have addressed diminished value in both first-party and third-party contexts.

Third-party diminished value: California courts have recognized that a vehicle owner may recover diminished value from an at-fault third party as part of the damages for negligent damage to personal property. This is consistent with the general principle of California tort law that a plaintiff is entitled to be compensated for all damages proximately caused by the defendant's negligence.

First-party diminished value: Whether diminished value is recoverable under a first-party collision or comprehensive claim depends on the language of the insured's own policy. California courts have generally held that first-party diminished value recovery depends on the specific policy language. Many standard automobile insurance policies do not expressly provide for diminished value recovery under first-party coverages.

Questions about diminished value recovery in a specific claim should be directed to a qualified attorney familiar with California insurance and tort law.

California's Fair Claims Settlement Practices Regulations (10 CCR § 2695 et seq.) are among the most detailed in the country. These regulations establish specific timeframes for acknowledging claims, investigating claims, and making coverage decisions. They also establish standards for the evaluation of claims and the documentation of claim files.

Under these regulations, insurers must conduct a thorough investigation of each claim, provide a written explanation of any denial or partial denial, and respond to communications from insureds within specified timeframes. Violations of these regulations may be reported to the California Department of Insurance.

The California Department of Insurance has enforcement authority over insurers that violate the Fair Claims Settlement Practices Regulations. Insureds who believe their claim has been mishandled may file a complaint with the California Department of Insurance.

California does not have a specific statute establishing licensing requirements for independent vehicle appraisers who participate in automobile insurance appraisal proceedings. Appraiser qualifications in the context of an automobile insurance appraisal are generally governed by the applicable policy language, which typically requires that each appraiser be competent and independent.

California does license public adjusters under the California Insurance Code. A public adjuster is not the same as an independent vehicle appraiser in the context of an automobile insurance appraisal clause. The roles and regulatory requirements are distinct.

Appraisal expenses — including the cost of each party's appraiser — are typically borne by the party who selected that appraiser. Umpire expenses are typically shared equally between the parties, as specified in the applicable policy.