Insurance Auto Auctions Announces Investment By ValueAct Capital Partners, L.P.

    SCHAUMBURG, Ill., Feb. 16 Insurance Auto Auctions, Inc.
, a leading provider of automotive salvage and claims
processing services in the United States, today announced that
ValueAct Capital Partners, L.P. ("ValueAct Capital") purchased approximately
1,667,000 shares of its common stock from another shareholder in a private
transaction.  The completion of that transaction increases ValueAct Capital's
total holdings to 1,924,457 shares of common stock or approximately 16.8% of
IAA's common stock outstanding.
    As a result of the transaction, ValueAct Capital asked for representation
on the Company's board of directors, and the Company has agreed to elect two
of ValueAct Capital's representatives to the Board.  Peter H. Kamin and
Jeffrey W. Ubben will fill the vacancies left after the recent resignations of
Thomas O'Malia, Chairman of the Board, and Christopher J. Knowles.  Joseph
Mazzella, an existing director, was elected the new Chairman of the Board.
    The Company's CEO, Thomas O'Brien, stated, "We welcome ValueAct Capital's
long-term view of the Company and I look forward to working closely with Peter
Kamin and Jeff Ubben on the board.  We also would like to thank Chris and Tom
for their valuable service and effort over the last few years."  Peter Kamin,
one of the ValueAct Capital principals, stated "We have made this investment
because of our confidence in Tom O'Brien's ability.  We believe in the long
term value of the Company and are excited to be actively involved in the
Company."  The Company has entered into a shareholder agreement with ValueAct
Capital.
    As a result of these changes to the board, the Company also postponed its
conference call with analysts and investors originally scheduled for February
14, 2001.  As Mr. O'Brien stated, "we would like to review and receive input
from our new directors on our strategic plan and potential restructuring
charges."  The Company will announce a new date for its conference call when
it will release its fourth quarter 2000 earnings.

    ValueAct Capital is an investment partnership focused primarily on making
a limited number of investments in small capitalization public companies.

    About Insurance Auto Auctions, Inc.
    Insurance Auto Auctions, Inc., founded in 1982, a leader in automotive
total loss and specialty salvage services in the United States, provides
insurance companies with cost-effective, turnkey solutions to process and sell
total-loss and recovered-theft vehicles.  The Company currently has 56 auction
sites across the United States.

    This press release contains forward-looking information that is subject
to certain risks, trends and uncertainties that could cause actual results
to differ materially from those projected, expressed, or implied by such
forward-looking information.  In some cases, you can identify forward-looking
statements by our use of words such as "may, will, should, anticipates,
believes, expects, plans, future, intends, could, estimate, predict, potential
or contingent," the negative of these terms or other similar expressions.  The
Company's actual results could differ materially from those discussed or
implied herein.  Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the Company's annual
report, Form 10-K for the fiscal year ended December 31, 1999 and the
Company's quarterly reports on Form 10-Q for the quarter ended June 30, 2000
and September 30, 2000.  Among these risks are:  conducting business pursuant
to the purchase agreement method of sale; fluctuations in the actual cash
value of salvage vehicles; the ability to successfully renegotiate existing
purchase agreement contracts; the quality and quantity of inventory available
from suppliers; the ability to pass through increased towing costs; that
vehicle processing time will improve; that the Company's towing business will
reach forecasted levels of profitability; legislative or regulatory acts,
changes in the market value of salvage; competition; the availability of
suitable acquisition candidates; the ability to bring new facilities to
expected earnings targets and the dependence on key insurance company
suppliers.

    For additional information regarding Insurance Auto Auctions free of
charge via fax, dial 1-800-PRO-INFO and use the Company's stock symbol,
"IAAI."
    Additional information about Insurance Auto Auctions, Inc. is available on
the World Wide Web at http://www.iaai.com .