Paul is correct.  I recently went thru this on an accident total out.
The ins. co. wanted to use the NADA book value which is an absolute
low-ball scam value created to serve certain vested interest groups like
insurance companies.

After getting advice here on how to fight it, I did what Paul suggested.
 The two best pieces of ammunition I had that caused them to pay the
fair value that I was asking were a printout from www.autotrader.com and
appraisal values from three local car dealers - all supporting the value
that I was asking.

I documented it all and printed it out.  I wrote it up just as if it was
a piece of evidence to be used in a small claims court case as a subtle
hint to them.  Any reasonable person reading thru it could see that what
I was claiming was (1) reasonable, and (2) credible (it's worth what the
local market says it is worth).  As soon as I faxed that to them, they
immediately agreed to my numbers - I even had them inflate the value so
that when I bought it back at salvage value, I still ended up with what
I was askigng as the market value (I was able to do this because the
value I was asking was actually a little below the true market value - I
told them that if they didn't agree to make the bottom line numbers come
out to what I was asking for, that I would go to court for the *full*
true market value - they took my first offer).

That autotrader.com printout was critical - it shows you what people are
actually asking for the exact car with same options in your local area.
  Take that value and deduct a little for what everyone knows is
negotiating room, and tell them that is what you should get for the car.
 Tell them that any reasonable judge would award that to you if it goes
to court (that lets them know you're willing to go to court.  Again -
the other critical info. was writtin appraisal values from the car
dealers.  I found that if I told them what I needed the appraisal value
for, they were very cooperative in providing a good number - most went
by the Kelley value even though the ins. co. insisted that no one goes
by them.  But having the dealer put that value on paper made a huge
difference.

With the time I spent on the phone and getting letters from sales
managers at the dealers (had to take a half day off of work to do that,
which of course they don't reimburse you for), I figure I broke even on
the whole deal.  The original offer was $1900.  I got a check for $3000
(after all slavage and other fees).. The Kelley was $3400-3600.

Bill Putney (to reply by e-mail, replace the last letter of the alphabet
in my adddress with the letter 'x')