Get the fair value you deserve for your totaled vehicle in California

California regulates first-party automobile total losses through two layered authorities: the Unfair Insurance Practices Act at California Insurance Code § 790.03(h), and the Fair Claims Settlement Practices Regulations at 10 CCR §§ 2695.7 and 2695.8. 10 CCR § 2695.8(b) governs first-party automobile total loss claims: (1) The insurer may elect a cash settlement based upon the actual cost of a "comparable automobile" less any deductible, including all applicable taxes, one-time fees incident to transfer of evidence of ownership, the license fee, and other annual fees computed based upon the remaining term of the loss vehicle's current registration. This procedure shall apply whether or not a replacement automobile is purchased. (2) A "comparable automobile" is one of like kind and quality, made by the same manufacturer, of the same or newer model year, of the same model type, of a similar body type, with options and mileage similar to the insured vehicle. Newer-model-year vehicles may not be used as comparables unless there are not sufficient same-model-year comparables. Any differences must be fairly adjusted, and any adjustments from the cost of a comparable automobile "must be discernible, measurable, itemized, and specified as well as appropriate in dollar amount and so documented in the claim file. Deductions taken from the cost of a comparable automobile that cannot be supported shall not be used." The actual cost of a comparable automobile shall not include any deduction for the condition of the loss vehicle "unless the documented condition of the loss vehicle is below average for that particular year, make and model of vehicle." A comparable automobile must have been available for retail purchase by the general public in the local market area within ninety (90) calendar days of the final settlement offer. The comparable automobiles used to calculate the cost shall be identified by the vehicle identification number (VIN), the stock or order number of the vehicle from a licensed dealer, or the license plate number of that comparable vehicle "if this information is available", and the identification shall also include the telephone number (including area code) or street address of the seller. (3) Notwithstanding (2), upon approval by the Department of Insurance, an insurer may use private sales data from the Department of Motor Vehicles, or other approved sources, that does not contain the seller's telephone number or street address. (4) The insurer shall take reasonable steps to verify that the determination of the cost of a comparable vehicle is accurate and representative of the market value of a comparable automobile in the local market area. The Department shall have access to all records, data, computer programs, or any other information used by the insurer or any other source to determine market value, on request. The cost of a comparable automobile shall be fully itemized and explained in writing for the claimant at the time the settlement offer is made. (5) An insurer may instead elect to offer a replacement automobile that is a specified comparable automobile available to the insured with all applicable taxes, license fees, and transfer-of-ownership fees paid, at no cost other than any deductible. A replacement automobile must be in as good or better overall condition than the insured vehicle and available for inspection within a reasonable distance of the insured's residence. 10 CCR § 2695.8(c) — Reopening a first-party total-loss claim. When the insurer sends the settlement payment or makes its final settlement offer, it must notify the insured that it will reopen its claim file if the insured tells it, within thirty-five (35) calendar days after receiving the claim payment or final settlement offer, that a comparable automobile cannot be purchased for the gross settlement amount. Once notified, the insurer must reopen its claim file and then locate a comparable automobile in the local market area, pay the difference on a comparable the insured located (or buy it for the insured), or invoke the appraisal provision of the policy. The duty does not apply where the insurer's final-offer documentation identified a specific available comparable automobile, with the seller's telephone number or street address and its VIN, stock or order number, or license plate. Cal. Ins. Code § 790.03(h) lists 16 unfair claim settlement practices, including: misrepresenting policy facts; failing to acknowledge claims promptly; failing to investigate reasonably; not attempting in good faith to effectuate prompt, fair, and equitable settlements when liability is reasonably clear; compelling insureds to litigate by offering substantially less than amounts ultimately recovered; and failing to provide a reasonable explanation for denial or compromise offer.

Egan v. Mutual of Omaha Insurance Co., 24 Cal. 3d 809 (1979), established that an insurer's breach of the implied covenant of good faith and fair dealing in the handling of a first-party claim sounds in tort, not contract — meaning consequential damages, emotional-distress damages, and (in egregious cases) punitive damages are available to the insured. Subsequent decisions including Wilson v. 21st Century Insurance Co., 42 Cal. 4th 713 (2007), refined the standard, holding that a "genuine dispute" over claim value is a complete defense to a tort bad-faith claim, but only when the insurer's investigation and analysis were objectively reasonable.