The way they determine the value of the old motor is by searching the web etc to find a comparable one for sale. This is also the way you can negotiate to get more for your motor, b/c usually they offer you much less. Once you start finding comparable motors, even different ones from same year and power... you will start having a better understanding of what that value is. It's kind of like having to determine what your used car is worth, you just get on the computer and see what everyone else is asking. Most likely, they will just give you the value you guys agree on. I would suggest you stress your insurance was purchasewd to keep you on the water and don't let them lowball you, because after all you will need to buy a replacement. If a replacement is cheaper than getting it fixed, they will give you that value. If it is a lot more, they will give you money for repair. That is usually how this works.