You asked if there is a state law on how insurance companies must calculate settlements for totaled motor vehicles.

Yes, there is a state law on how insurance companies must calculate settlements for totaled motor vehicles. Section 38a-353 of the Connecticut General Statutes requires that whenever any damaged motor vehicle covered under an automobile insurance policy has been declared to be a “constructive total loss” by the insurer, the insurer must, in calculating the value of the vehicle for purposes of determining the settlement amount to be paid to the claimant, use at least the average of the retail values given such vehicle by (1) the National Automobile Dealers Association (NADA) used car guide and (2) one other automobile industry source that has been approved for such use by the insurance commissioner. For purposes of this statute, "constructive total loss" means that the cost to repair or salvage damaged property, or the cost to both repair and salvage such property, equals or exceeds the total value of the property at the time of loss.

There are currently five commissioner-approved “second source” companies: (1) Automobile Red Book, (2) Mitchell International, (3) CCC Information Services, Inc. , (4) ADP Claim Solutions Group, and (5) Auto Bid, Inc.

If a person has a concern with how an insurer calculated a settlement offer, he may contact the Insurance Department’s Consumer Affairs Division for assistance at (860) 297-3900 or 1-800-203-3447.