The appraiser never identifies the owner and usually calls three recognized dealers and presents them with his information. Each dealer tells the appraiser what he would retail the vehicle for and an average of these values is verified against the "Black Book" value to ensure its accuracy. In the event the vehicle owner disagrees with their insurer over the value of the vehicle, most insurance companies allow for a second round of appraisals. After two rounds of appraisals, if there is still a disagreement, an arbitration process can be initiated.

Depreciation is a fact of life where automobiles are concerned. Many people are surprised to find that their vehicle is not worth as much as they thought. There are, however, four important ways to protect yourself in this regard:

1. An OPCF 43 (known as a Removing Depreciation Endorsement) can be purchased when you buy a new car from a dealer. In the event of a total loss, the insurance company will cover you for the lowest of these three amounts:

[a] the actual purchase price of the vehicle and its equipment

[b] the manufacturer’s suggested list price and its equipment on the original date of purchase or [c] the cost of replacing the vehicle with a new one of the same make and model with similar equipment.

Depending on your insurance company, this coverage is limited to 24 or 30 months from the date of purchase of your vehicle. However, if you renewed your policy before this time period has expired, the coverage is valid until the expiry of your policy with the majority of insurance companies.

2. In the case of classic or antique vehicles, a special OPCF 19a (known as an Agreed Value of Automobile Endorsement) can be added to your policy. In the event of a loss, the insurance company will pay up to the value indicated in this endorsement. There is no additional premium for this other than the premium charged for insuring the vehicle at its appraised value.

3. If you’re buying a used vehicle – do your homework. Make sure it is good value. Sometimes the amount being asked for a vehicle is considerably more than it is actually worth. This can be a problem if you have financed it and must continue to make payments on a vehicle that has been written off or stolen.

4. If you’ve leased your vehicle, it’s possible that your lease buyout could be higher than the actual cash value – in which case you will owe the difference. Some manufacturers, through their lease agreement, agree to waive this difference. Check your lease.

Finally, if you’ve made any recent improvements to your vehicle that affect its value, be sure to keep the receipts. You may need to provide them as proof of enhancements.