When an accident occurs, one of the first concerns for vehicle owners is the cost of repairs, or whether their car will be deemed a total loss. To address this, insurance companies heavily rely on professional assessors to conduct thorough evaluations of the damage.
These assessments are critical in determining the accurate repair method and cost or replacement value, enabling insurers to offer fair and transparent settlements to policyholders, while also effectively managing repair costs and mitigating financial risk.
But how does this process work, and what factors influence the final valuation?
In this article, we’ll explore how independent assessors evaluate vehicle damage, the role of modern technology in assessments, and why motor vehicle repairs are becoming so expensive (and driving those insurance premiums up).
The key takeaways
- Independent Assessors Ensure Fair Valuations
- Independent loss assessors ensure vehicle damage valuations are accurate and fair, balancing repair feasibility, market value, and cost-effectiveness.
- Advanced Vehicle Technology Is Driving Up Repair Costs
- Modern vehicles feature integrated sensors, ADAS systems, and aluminium panels, making even minor repairs more complex and expensive — sometimes exceeding $4,000 for quite minor front-end damage.
- Labour Shortages and Rising Parts Prices Are Increasing Insurance Costs
- A shortage of skilled technicians, rising wages, and manufacturer restrictions on repair software are increasing repair costs. A single adaptive LED headlight regularly costs over $2,000, even for the most common makes.
- AI and Digital Tools Are Enhancing Damage Assessments
- Insurance providers are adopting AI-driven assessment tools to improve efficiency and accuracy, while technical assessors like AAMC leverage digital solutions to improve efficiency whilst ensuring fair and reasonable repair costs.
The Role of Independent Assessors in Damage Valuation
Independent assessors play an essential role in ensuring fair and accurate damage valuations. Unlike many insurer’s assessors and repairers, they provide an objective assessment of the vehicle’s condition, factoring in repair feasibility, market value, and overall cost-effectiveness.
At AAMC, our experienced assessors use their industry knowledge, experience and a broad range of references and resource information to determine the most appropriate repair solutions. Our goal is to ensure that motor accident claims are processed efficiently while maintaining fairness for all parties involved.
Key Factors in Car Damage Assessments
Insurance companies and assessors consider multiple factors when determining the value of vehicle damage.
These include:
Vehicle Condition Prior to the Accident
A car’s age, mileage, and maintenance history all affect its valuation. Well-maintained vehicles may retain higher value compared to those with wear and tear.
Extent and Location of Damage
Not all damage is equal. Modern vehicles often integrate critical safety and driver-assist features in vulnerable areas, making seemingly minor collisions expensive to repair.
For example:
- Adaptive cruise control sensors, parking sensors, and front-facing cameras are commonly located in bumpers and grilles. If damaged, replacing and recalibrating them can exceed $4,000.
- Windscreens now feature ADAS (Advanced Driver Assistance Systems) cameras, requiring recalibration after replacement. This adds $500–$1,500 in costs.
Market Value and Depreciation
Insurers use the Actual Cash Value (ACV) method to determine a vehicle’s worth pre-accident. Depreciation, mileage, and demand for specific models all play a role in the final valuation.
Why Are Repairs Becoming More Expensive?
Put simply, the more advanced new vehicles become, the more expensive they are to repair and maintain.
“A small front-end collision that would have cost $1,500 a decade ago can now exceed $4,000 due to integrated sensors, recalibration requirements, and specialised labour,” says Luke Hill, National Operations Manager at AAMC.
“Windscreen replacements alone can add $500–$1,500 due to embedded ADAS cameras.”
Here’s a breakdown of the increased costs.
Advanced Vehicle Technology & Materials
Many features once reserved for luxury vehicles are now standard across mainstream models. This includes:
- Aluminium panels. These require specialist equipment and training to repair — 30–50% more expensive than steel.
- High-voltage Electric Vehicle and hybrid repair. These demand additional technician training and safety protocols, increasing labour costs.
Higher Labour Costs & Skills Shortages
The repair industry currently faces a shortage of skilled technicians, leading to increased labour rates. Specialised training for ADAS calibration, EV repairs, and manufacturer-specific software also adds costs.
More Expensive Replacement Parts
With the rise of complex vehicle components, replacement parts have skyrocketed in price:
- A late model Mazda headlight assembly costs over $2,000, compared to $400–$500 for an older halogen equivalent.
- Many manufacturers restrict access to repair software, meaning dealerships must handle reprogramming, adding to the overall expense.
Rising Costs in Paint & Consumables
Stricter environmental regulations and advanced paint processes have made refinishing more expensive. Specialised coatings for modern vehicles also require precise application, and this further increases costs.
The Accident Management Process: From Estimate to Settlement
Initial Damage Reporting
The process begins with AAMC being notified of a vehicle damage incident. The contact centre immediately engages with the customer and assists in facilitating a repairer, estimate and often digital images of the damage.
Repair Cost Estimation
Repairers submit detailed estimates, which are then validated by AAMC assessors to ensure costs are fair and justified.
Determining Total Loss vs. Repair
If repair costs exceed a certain percentage of the vehicle’s value, an assessor may declare it a total loss. This decision is increasingly influenced by modern technology — higher repair costs mean more vehicles are being written off.
Technological Advancements in Damage Assessment
AI and Digital Tools in Vehicle Appraisals
The industry is embracing AI-driven assessment tools to improve speed and accuracy. These systems analyse images of vehicle damage, providing instant repair estimates and fraud detection capabilities.
An example of this is AAMC’s most recent collaboration with Hail.com. Hail.com created advanced 3D scanning technology to assess vehicles damaged by hail.
AAMC’s Technological Initiatives
At AAMC, we leverage digital images and AI-powered analysis to enhance our loss assessing services. This ensures more consistent valuations on total loss vehicles whilst reducing processing times.
Ensuring Fair and Reasonable Repair Costs
Fair & Reasonable (F&R) Reviews
On lower value claims for minor damage, where an inspection is not warranted, AAMC assessors conduct independent reviews to ensure repairers charge industry-appropriate rates.
Third-Party Intervention Strategies
Proactive intervention helps reduce inflated third-party repair and hire-car costs. AAMC provides strategies to minimise excessive claims, leading to significant cost savings for insurers and policyholders alike.
Challenges in Modern Vehicle Assessments
Complexity of Advanced Vehicle Technologies
As technology advances, the cost of repairs rises. Insurers must continuously adapt their assessment methods to accommodate new challenges.
Electric and hybrid vehicles are the perfect example of this. These technologies call for highly skilled and experienced technicians who hold higher levels of education and, therefore, demand a higher labour rate.
Not only that, but the parts these cars require are already far more expensive than their previous counterparts.
Regulatory Compliance and Industry Standards
With ever-changing regulations, AAMC’s assessing services must align with current standards to ensure compliance and fairness.
Partner with AAMC Today
We’re excited to continue navigating this changing area of vehicle insurance. Ready to get started with AAMC? Talk to a specialist.