Questions & answers · Car insurance
In New Jersey, how does the other driver's insurer set the value of my totaled car, and what if I find a similar car that costs more?
Car insurancePaid too littleNew JerseyChecked Nov 5, 2026
From K.Actuary, founded by Sangmin Kwon, ASA · sources checked 2026-11-05 · Source: New Jersey Department of Banking and Insurance (NJDOBI) View original ↗
In short
- In New Jersey, an insurer must use one of three set ways to value a totaled car.
- It must show you what it added, what it took off, and the sales tax.
- If you find a similar car within 30 days after the check, the insurer must act.
What this means
This answer uses one New Jersey Department of Banking and Insurance page. The page says each insurer must pick one of three approved ways to value a total loss. One way is the average of used-car guide prices. Another is a quote from a nearby dealer for a similar car. The third is an approved computer service.
The insurer must give you a list showing what it added, what it took off, and the sales tax. If you find a similar car within 30 days after you get the settlement check, the insurer must do one of three things. It can pay you the difference, negotiate the price of the car you found, or find a similar car you can buy at the value it offered. The sources do not say what dollar amount is right for your car.
Your next step
Ask the insurer in writing which method it used and for the itemized list. If you find a similar car, tell the insurer within 30 days after you receive the settlement check, as the page says.
Check it yourself
Open the NJDOBI page and read questions 16 and 18.
Where this comes from (1)
[1] New Jersey Department of Banking and Insurance (NJDOBI) · checked 2026-11-05
Each insurance company is required to select one of three prescribed methods for use in the settlement of all their total loss claims. The three methods which have been approved by the Commissioner of Banking and Insurance are: 1. Taking the average of the retail values of substantially similar vehicles as listed in the current editions of the "Automobile Red Book" (or "Older Car Red Book") published by Penton Media …
How we found this
We matched your question to 1 official source, quoted the exact lines, and re-checked each quote against its source on 2026-11-05.
What we don’t know yet
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Information only — not legal advice. Your plan, insurer or agency decides.
This answer quotes the official sources listed above, with the date we checked them. Your own policy, notice and state rules control. We are not your lawyer or your insurer. We don’t file, argue or negotiate claims for you — you send any letter or form yourself.
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- They totaled my car. How is the amount set, can I keep the car, and what happens to the title?
Answer id CQ3053. Spotted an error? Tell us.