DETERMINING AUTOMOBILE ACV

Recently the 5th Circuit Court of Appeals in Singleton v. Elephant Insurance Co., 953 F.3d 334 (5th Cir. 2020), held that an insurance policy provision which limited the insurer’s liability for a totaled car to “actual cash value” of the car at the time of the accident did not include a requirement to pay taxes and fees. According to the Court, ACV was the equivalent to fair market value which, under Texas law, was the price a willing buyer would pay and a willing seller would accept for the vehicle. While the taxes might be considered by negotiating parties when agreeing to a price, that practice did not require that taxes be added to the price when calculating fair market value.