The department has issued a bulletin to insurers regarding use of third-party valuation software to determine the actual cash value of total loss vehicles. The bulletin states that the use of valuation software alone does not necessarily satisfy an insurer's obligation to ensure a fair and equitable settlement according to statute. Concerns stem to condition adjustments and vehicle factors not captured by the software.

Insurers are required to conduct a reasonable investigation and ensure that a prompt, fair settlement is achieved when liability becomes clear pursuant to section 375.1007, RSMo.

Insurers are encouraged to consider the following when determining a settlement:

• Identify and apply any vehicle-specific trim packages and options
• Consider after-purchase upgrades that may be compensable
• Ensure deductions are not duplicated by the software
• Apply increases to the value of the vehicle if the vehicle is in above average condition
• Avoid adjusting value based on negotiation tactics such as haggling because that could lead to unfair settlements

All adjustmentes based on betterment or depreciation must be noted in the claim file, itemized, explained, and be fair and reasonable. A full copy of the bulletin may be found here.