Is there a law that insurance companies must pay replacement value on a car instead of blue book value?
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Is there a law that insurance companies must pay replacement value on a car instead of blue book value?
Asked on September 18, 2010 under Accident Law, Ohio
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
There is an old saying that you get what you pay for. Generally, when you insure a "regular" car with "regular" insurance you are paying an insurance premium that does not cover the car's "replacement" value, as you mean it to be here I think which is not the blue book value, correct? Cars depreciate the minute you drive them off the lot. Some car owners do carry replacement value for a car. Those are generally car owners of antique or collector cars and believe me, they pay for that privilege in their premiums. Generally, you are entitled to your car being restored to its "pre-loss" condition and that does not necessarily mean that the insurance company will repair the car with brand new parts after the accident. Your rights as to same are governed by your state law on the issue. Some states allow for the use of after market parts. Good luck.
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