MO| Missouri Insurance Bulletin 26-04 advises that while insurers may use third-party valuation software to determine the actual cash value of total loss vehicles, they remain responsible for conducting a reasonable investigation and ensuring prompt, fair, and equitable settlements under the Missouri Unfair Claims Settlement Practices Act and related regulations. The bulletin highlights risks of undervaluation when condition adjustments and vehicle-specific factors are arbitrary, undocumented, duplicative of system deductions, or influenced by negotiation tactics rather than objective criteria. Insurers are instructed to carefully apply and document all valuation inputs, including options, upgrades, condition, mileage, software weighting and adjustments, and to maintain claim files in a manner that clearly supports the final valuation and allows for auditing, with encouragement to notify the Department if internal reviews identify missing documentation.
Key Points:
- Key software selections (weighting, condition levels, options) must be preserved in the file to support audits, and insurers are encouraged to report gaps discovered in internal reviews.
- Use of valuation software does not, by itself, satisfy the duty to achieve a fair and equitable settlement.
- All betterment/depreciation and condition adjustments must be itemized, explained, non-duplicative, and clearly documented in the claim file.