What does salvage value mean and what is its effect?
If the vehicle is a total loss, you and the insurance company must agree on your vehicle’s pre-accident fair market value (FMV). If the insurance company pays you the FMV, they will want to keep your damaged vehicle. This is because there is usually some residual or leftover value in totally damaged vehicles. The value of what is left of the ‘total loss’ vehicle is referred to as the ‘salvage value’. If you wish to keep the vehicle then you have the right to ask the insurance company to pay you the FMV less the salvage value of your vehicle. Example: If it was determined that your car had a fair market value of $5,000 and a salvage value of $1,100, the insurance company can pay you $5,000 and keep the car or pay $3,900 and leave you with ownership and possession of the damaged vehicle. Be aware that salvaged cars in California have to be registered as a “Salvage” title, which drastically affects the value of the vehicle. At Cohn & Swartzon, we will work hard to get you the highest fair
