Massachusetts Automotive Damage Appraiser Practice Test 2025 - Free Appraiser Questions and Exam Study Guide

Settlement options in auto damage claims typically involve approaches like repairing the vehicle, replacing it, or compensating the owner through a monetary settlement based on the vehicle's fair market value.

Repairing the vehicle is a common route where the insurer covers the costs of fixing the damages incurred in an accident. Replacement may occur if the cost of repairs exceeds a certain threshold, or if the damage is beyond feasible repair, allowing the insured to receive a new or comparable vehicle. Issuing a check for the fair market value is another standard procedure where insurers determine the vehicle's value and provide a monetary settlement accordingly.

However, selling the damaged vehicle to a third party is not a typical option for the insurer when settling claims. Insurers generally focus on either repairing or replacing the vehicle or compensating the policyholder for their loss. Selling to a third party would involve complexities such as titles, ownership transfer, and potential liability issues that are not standard practices in the settlement process. This makes it a less viable option compared to the others listed.