Missouri just put auto insurers on notice: claims valuation software alone won't cut it when settling total loss vehicle claims.
On March 17, 2026, the Missouri Department of Commerce and Insurance issued Insurance Bulletin 26-04, a guidance document directed at all property and casualty insurers writing automobile insurance coverages in the state. Signed by Director Angela L. Nelson, the bulletin lays out what the Department sees as problem areas in how insurers use third-party software to determine the actual cash value of totaled vehicles - and what it expects them to do about it.
The gist? Valuation software is fine to use, but leaning on it without a closer look at the numbers could land insurers on the wrong side of the Missouri Unfair Claims Settlement Practices Act (§§ 375.1000 to 375.1018, RSMo).
The bulletin flags a core concern: undervaluation. According to the Department, issues like arbitrary or undocumented condition adjustments, along with vehicle-specific factors the software simply doesn't capture, can push settlement offers below what's fair - a potential violation of section 375.1007, RSMo, which requires a prompt, fair, and equitable settlement once liability is reasonably clear.
Here's how the problem tends to unfold. Valuation software typically sets a base value by comparing the totaled vehicle to similar ones on the market. Insurers can choose a starting point that may already factor in reductions from dealer-level pricing down to privately owned levels. The software may also apply weighting factors to zero in on a value closest to the loss vehicle. Then a claims handler steps in and adjusts further - for dealer packages, options, mileage, and condition.
It's in that stacking of deductions where the Department sees trouble. If the software has already knocked value off for wear and tear and the adjuster docks the same thing again, that's a duplicative deduction — and the bulletin says it shouldn't happen. On the flip side, if the vehicle is in better condition than the condition ratings provided by the valuation software vendor, insurers should be adjusting the value up, not leaving it as is.
The Department also takes aim at negotiation-style tactics. Adjusting values based on haggling, for instance, is flagged as highly subjective and something that may lead to unfair settlements.
On the documentation front, the bulletin reminds insurers that every adjustment for betterment or depreciation needs to be in the claim file - itemized, explained, and fair and reasonable, consistent with 20 CSR 100-1.050(2)(E). That includes the inputs built into the software itself, like weighting and condition settings, which the Department says are needed to audit the vehicle's value under 20 CSR 100-8.040(3)(B). If an internal review turns up gaps in documentation on total loss claims, insurers are encouraged to notify the Department under section 374.049.9, RSMo.
The bulletin does come with a caveat: per section 374.015, RSMo, it does not have the force and effect of law and is not binding on the Department. But as a statement of where regulators are looking, it's hard to ignore.
For questions, the Department directs insurers to the Market Conduct Section at marketconduct@insurance.mo.gov.
