Actual Cash Value or Fair Market Value?


Actual Cash Value and Fair Market Value

I’ll bet that no one has explained to you what I am about to explain . . .First of all, the terms Actual Cash Value (ACV) and/or Fair Market Value (FMV) are sorely lacking and ambiguous when it comes to actually helping to define the value of a private passenger automobile.  In fact, the formal definition in almost every source one can find leaves out the MAIN ASPECT that would make the definition useful.  The terms ACV and FMV are so ambiguous that they are totally meaningless when it comes to figuring out the value of your vehicle.  Don’t believe me, let’s break it down.  Start with familiarizing yourself with the “formal” definitions.

Below are three definitions for each term from well known and frequently cited sources:


1.  Actual Cash Value:  The fair or reasonable cash price for which property could be sold in the market, in the ordinary course of business, and not at forced sale; the price it will bring in fair market after reasonable efforts to find a purchaser who will give the highest price.  What is ACTUAL CASH VALUE? definition of ACTUAL CASH VALUE (Black’s Law Dictionary). (2011). The Law Dictionary. Retrieved 12 October 2017, from
2.  Actual Cash Value:  In property and auto physical damage insurance, one of several possible methods of establishng the value of insured property to determine the amount the insurere will pay in the event of laoss.  ACV is typically calculated one of three ways; (1) the cost to repair or replace the damaged property, minus depreciation; (2) the damaged propertys’ “fair market value”; or (3) using the “broad evidence rule.” which calls for considering all relevant evidence of the value of the damaged property.  actual cash value (ACV) – Insurance Glossary | . (2017). Retrieved 12 October 2017, from
3.  Actual Cash Value: In the property and casualty insurance industry, Actual Cash Value (ACV) is a method of valuing insured property, or the value computed by that method.  Actual Cash Value (ACV) is not equal to replacement cost value (RCV).  ACV is computed by subtracting the depreciation from replacement cost.  The depreciation is usually calculated by establishing a useful life of the item determining what percentage of that life remains.  This percentage multiplied by the replacement cost equals the ACV. “Actual Cash Value.” N. p., 2017. Web. 12 Oct. 2017.


 1.  Fair Market Value:  The price a buyer will pay.  All parties are willing and aware of the property and its value. What is FAIR MARKET VALUE (FMV)? definition of FAIR MARKET VALUE (FMV) (Black’s Law Dictionary). (2012). The Law Dictionary. Retrieved 12 October 2017, from
2. Fair Market Value:  FMV is an estimate of the market value of a property, based on what a knwledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market.  “Fair Market Value.” N. p., 2017. Web. 12 Oct. 2017.
3.  Fair Market Value:  Probable price at which a willing buyer will buy from a willing seller when (1) both are unrelated, (2) know the relevant facts, (3) neither is under any compulsion to buy or sell, and (4) all rights and benefit inherent in (or attributable to) the item must have been included in the transfer.  FMV is generally the basis for tax assessment and court awards. “What Is Fair Market Value (FMV)? Definition And Meaning.” N. p., 2017. Web. 12 Oct. 2017.



So, you might be saying, what is so ambiguous about the definitions?  When you read through them, they sound formal and clear enough, right?  Wrong!

Think about it. . .

EACH AND EVERY formal definition is missing a clarification of which MARKET!

closer look

Go back and look.  They don’t tell us WHICH market or even say that a market definition is required.  Now. . . Is it not true that I can sell my vehicle to a willing buyer off of Craigslist (private party market), or that  I can also sell my vehicle to a willing buyer who is a dealer (trade-in market)?  If I am a dealer can I not sell my vehicle to another willing dealer (wholesale market), or could I sell my vehicle to a willing consumer that comes to my sales lot (retail market)?  I’ve just listed four different markets for an automobile!  They will all have different values even for the exact same vehicle!

In fact, there is NO WAY to determine an accurate FMV or ACV without some further clarification of the market and type of value.  Unfortunately, claims managers and supervisors, insurance adjusters, and damage estimators (who are told by their employers that they are also qualified appraisers) have very little experience with the legal requirements for formal appraisals that prove value.  Insurance company employees follow a set of instructions from their boss, or they get fired.  Although they could, insurance carriers (except the few good ones) refuse to train their staff.  Sadly, instead of hiring an expert to train their staff, most insurance companies simply tell their claims people to “use this method” and drive home that the method they are trained to use will give them a fair ACV or FMV. Even more sad, very few adjusters will question authority (it’s in the nature of the job to follow instruction or get fired), so they simply regurgitate the false information they are trained to provide when any vehicle owner disputes the validity of their ACV or FMV figures.

Have you heard “That’s not how it works, sir/ma’am”?

Mind you, these same adjusters NEVER use an FMV or ACV that properly defines the market and type of value that they allegedly compute.  It’s corporate brainwashing / institutionalizing at its best.  The insurance carrier adjuster is afraid to ask. . .  Fair WHAT MARKET Value?  Or Actual cash value in WHAT MARKET?  They won’t rock the boat because they might lose their job.  It’s much easier to just do what the boss says and not worry about the “right” thing to do.

Even worse, in the RARE instance that an insurance company has defined a market and value it is invariably the WRONG one!  For total loss claims, carriers like to imply that the right market to measure is the private party market.  This results in LOWER payouts than if they used the proper market (retail).  In the same way, carriers like to imply that the right market to measure for a diminished value claim is the retail market.  Again, this results in a LOWER payout than the appropriate market (trade-in).

When I started Petty Details, LLC, I had already spent years researching how to properly perform an appraisal of value.  What I found out is that there are very few reliable experts and only a handful of cases and data that is reliable regarding appraisal standards.  With the help of numerous attorneys, I’ve thoroughly researched what is required if one wishes to prove vehicle value in a court of law.  I found that each State has similar rules and that if an appraiser is going to go to court and testify, then they can be challenged under various different standards (a whole other article).  Simply put, any appraiser that writes an appraisal (if they want it to hold water in court) needs to make sure they can pass the Daubert or Frye standard (or their equivalent) and that they conducted their appraisal appropriately.

Courts want to see that there is a sound method for arriving at expert opinions of value.  The method I found which was the MOST PREVELANT in the US is called the USPAP or Uniform Standards of Professional Appraisal Practice.  The IRS and most professional appraisers will require that written appraisals be developed and produced in the manner prescribed by the USPAP guide.  I got a copy of the guide and painstakingly went through it.  It is very good and thorough.  It addresses almost every problem that an appraiser might face when attempting to place a value on property (of any type).  It has standards for real property (like houses) and personal property (like an automobile) and all other types of property (antiques, profit, etc.). Insurance companies will refuse to acknowledge these formal standards.  I think it is because it helps them to make offers that are not in line with the values in the appropriate market.

If they used the standard then one of the first rules is that the appraiser must DEFINE THE MARKET! 

Here is the quote right out of the USPAP Standard 7 (for personal property):

“(b)  define and analyze the appropriate market consistent with the type and definition of value: and

 COMMENT:   The appraiser must recognize that there are distinct levels of trade (measurable marketplaces) and each may generate its own data.  For example, a property may have a different value at a wholesale level of trade, retail level of trade, or under various auction conditions.  Therefore, the appraiser must analyze the subject property within the correct market context.”

As you can see, when a formal standard for appraising value is used, then there is a requirement to DEFINE what MARKET is being measured AND to define the value (ACV or FMV).  The lack of a defined market why the reliance on simply saying they used the ACV and FMV is lacking, and in my opinion VERY misleading.

To summarize, it’s unfortunate that the lack of formal appraising knowledge is especially evident in automobile value disputes.  Because of the relatively low values that typically involved, carriers bully victims and customers.  For a dispute that is under $10000, it is exceedingly difficult to get competent help, and carriers know this.

They ignore you or simply tell you “that’s how it is ma’am/ sir,” and hope you give up.


I like proving that difficult / impossible things are only difficult or impossible until somebody makes them easy or possible.  I don’t have any quit in me.  If you have a dispute about the value of your vehicle, get the facts.  Don’t you dare believe that an insurance company is following appraisal rules when determining the ACV / FMV.  I assure you they are following INSURANCE rules, not appraising rules.  Get an expert like me to confirm whether they’re properly valuing your property.  If you’re an insurance company, get a qualified expert to help you do the right thing or the victim might find me and the team at Petty Details, LLC!

Call us immediately if you have questions.  Information is always free at Petty Details, LLC!


Do you have to sell your car to prove your diminished value? A Graph

What do you think? Do you have to sell your car in order to prove that it has lost value?

does your car have to be sold

To the surprise of me and my client’s attorney, we recently had a Judge that said YES.  Insurance adjusters are trained to say YES to the title question, too. But what do you think? The graphic with this article sorta sums up why the law does not agree with the Judge or the insurance adjusters, but I’ll go a little further to drive the point home.

No, Really…Do You Have To Sell Your Car To Prove Diminished Value?

Am I richer when the prices of my stocks go up?

Am I poorer when my stock values are down?

If average home prices around the home I own rise, am I richer?

If I trade my Lamborghini even for a Toyota Corolla, am I richer, or poorer?

If the doctor says I need a $10000.00 surgery to save my foot, am I richer if I don’t get the surgery?

If I lose my foot, and then use a prosthetic, is the cost of maintaining and replacing the prosthetic, along with the future medical costs I will incur part of the value of my claim, or does it only count when I actually go and pay for the care?

If everybody in your neighborhood paid $500 for a grill from the hardware store, and you found an identical one on Craigslist for $325.00 and still in the box, what is the market value of the grill?

If I have a Rolex valued at $22,000.00 by a well known Rolex appraiser, and I sell it for $18000.00, did I change the value of the Rolex?

If a sell price dictates market value, then there is no such thing as a “good deal”.


Auto Accident – Do You Need an Attorney?

do I need an attorney

Do you need an attorney for your auto accident?

Answer the question for yourself!

Let me start by saying that some people never need an attorney, and others will always need an attorney.

Additionally, this article is based on my 15 years of claims adjusting experience. I have developed a simple little formula that will help you decide if you need an attorney or not. Keep in mind, this quiz is tailored for auto accidents only, and I make no warranties or guarantees that your result is a foolproof answer.

Ultimately, the only person that can decide if you need an attorney is you.

With that being said, simply answer the following 15 questions and then add up your answers. All of these questions are yes or no questions. Whatever answer you have the most of is your answer to the title of this article.


Where Can I Get A Diminished Value Appraisal? 7 Tips

diminished value appraisalWhere can I get a diminished value appraisal?

If you are doing research on how to get paid for your vehicle’s diminished value, then you know that the advice on the street is to get a diminished value appraisal from a qualified expert.  Are you feeling lost or overwhelmed in the process?  You aren’t alone!

So how do you pick a qualified expert?



made whole doctrine

Made Whole Doctrine: Are you being preyed upon?

Insurance companies count on vehicle owners not knowing about the law, specifically the made whole doctrine.  They use the lack of knowledge by the layman to prey on accident victims for profit.  Right now, many of the accident victims that are reading this article are being further victimized by their own insurance company, and many times the adjusters that are doing the victimizing have been indoctrinated to believe they are doing the right thing and that they are within the law.

Let me be very clear here: Insurance companies routinely steal money from their own customers through improper and illegal subrogation activities.



invalid diminished value claim denial
If you’ve had the displeasure of being in an accident where your vehicle was repairable, you’ve probably experienced a loss in the resale value of your vehicle, no matter how well it was repaired.

Additionally, in the vast majority of cases the insurance company that is responsible for settling the claim with you gives you an unfair and invalid diminished value claim denial.  In my view, the denial of these valid claims is an act of fraud.

If it is fraud, then why doesn’t the insurance company get in trouble for it?

The primary reason is that there are very few attorneys and even fewer accident victims that really understand the denials.  Because of that, it is difficult for the accident victim to defeat the illogical and unlawful reasons that insurance companies use to deny diminished value claims.  I thought long and hard about what I could do to help accident victims get fair compensation for lost value, and outside of preparing an appraisal for them and directing them to an attorney that will take their case, the best I can do is to educate.  So that is exactly what I will do right now!

I’ve already published one article that gives some responses to common denials, but in this post, I am going to pull out the stops and address every denial reason I can find, and provide all the proper reasons why the denials are invalid, improper, and in most cases, fraudulent.


Has Attorney Montie Day Changed California Diminished Value Law?

California diminished value law

In the small world of automobile claims, there’s new buzz surrounding California Diminished Value law and the recent changes in California Jury Instructions regarding property damage to automobiles.

The changes came in response to one attorney’s relentless pursuit of justice. Attorney Montie S. Day refused to sit idly by when he realized California insurance carriers and their adjusters were using language in official jury instructions to try and make accident victims believe they could not legally recover lost value damages.  Specifically, we’re talking about inherent lost market value to automobiles, or as it is more commonly known, diminished value or simply DV.  Market surveys and sales prove that damaged and repaired vehicles are generally less desirable (thus, less valuable) on the resale market than identical vehicles that have never been damaged and repaired.

What’s interesting here is that big changes are expected, yet there is no new California Diminished Value law.  What the insightful Mr. Day attacked was not improper law (jury instructions are not law, and the law in California already recognized the right of a victim to recover inherent lost value aka diminished value).  Instead he realized insurance carriers were using language in the jury instructions to mislead accident victims and imply that the law in California would not allow recovery of inherent diminished value, so he attacked and exposed that unfair and misleading tactic.


How The Amount Of The Repair Bill Affects Diminished Value

how repair bill affects diminished value

Severity of Damage and Inherent Diminished Value

In a professional forum for diminished value providers, we had a member inquire about how the amount of the repair bill affects the diminished value (inherent) of a vehicle. It is my experience that the amount of damages is an imperative factor to have in order to accurately assess diminished value.

Let’s dig right into the details…

Click for the Truth About How The Repair Bill Affects Diminished Value

Collision Repair – 7 Things You Need to Know

auto collision repair

Worried about your collision repair after an auto accident?

You ought to be.

In nearly 15 years as an adjuster, I have seen some doozies when it comes to collision repair.

Not all shops are crooks, but body shops, like any other business, are in business to make money. Most people are not experts on collision repair, and body shops know this. Taking your car to a body shop is sort of like going to the doctor or hiring an attorney. You kind of have to trust what the doctor or lawyer says because they are specially trained. It is the same for a body shop, you kind of have to trust what they tell you because they are specially trained.


Auto Accident: Third Party Claim and Myths About Adjusters

third party claim

What is a third party claim and what do you need to know?

Anytime you’re involved in an auto accident and it was not your fault, you potentially have a third party claim.

If the at fault party has liability insurance, then when you file a claim with their insurance company and you have a third party claim. I have read quite a few articles that give a lot of bad information about adjusters. The thing I have noticed about those articles is that none of them were written by an insurance adjuster! I’d be willing to bet that if you have not been an insurance adjuster, then you believe insurance adjusters are almost as bad as used car salesmen or attorneys, hehehe. It is a common view. I can’t speak for every single insurance claims office out there, but I can say that I have worked for 5 different non-standard companies as an adjuster, and I have worked on contract for many standard companies as a recovery specialist with a firm.

I have never been instructed to deny any valid claim, nor have I been advised to “low-ball” claimants. This might happen at some companies, but it is definitely not the norm. Insurance adjusters (if they care about their license) will usually try very hard to fairly resolve claims. I will say that I have definitely dealt with some companies that have some “questionable” practices. I won’t name names, but some of these companies simply attempt to cut costs by hiring inexperienced adjusters and giving them a “rule-book”. It is the inexperience of the adjuster in interpreting the “rules” that causes the majority of the issues.


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