Insurance Quote
Discussion
Renewing the wife’s car insurance I was about to accept the quote, but before pressing I decided to double check and make sure all details were correct. On further inspection it has inputted a value for her car by me adding her registration number, I certainly didn’t enter its worth. Initial quote had no mention of value and would have clearly been missed if I hadn’t gone back in to check.
Checking secondhand prices through AT there’s a minimum discrepancy of £2k. I assume this is due to the present inflated cost of used cars, but I'm now concerned that if I accept the policy and she totals her car in the next 12 months she will be a minimum of a couple of grand short to get the same car, would that be correct?
Checking secondhand prices through AT there’s a minimum discrepancy of £2k. I assume this is due to the present inflated cost of used cars, but I'm now concerned that if I accept the policy and she totals her car in the next 12 months she will be a minimum of a couple of grand short to get the same car, would that be correct?
MitchT said:
I've been running quotes for BMW 440s that I'm looking at, putting in the reg number each time. They've all estimated a value about 10% less than the dealer's asking price.
10% is arguably about the difference between 'fair value ' and 'trade asking price'.With cheaper/older vehicles the discrepancy can be more like 50%. Or more!
If you've got a 15 year old vehicle in good nick, and the average of its sister ships has already been scrapped, their 'estimate' may need challenging!
speedking31 said:
Genuine question: what is the point of the value question if it holds no weight in the quote?
If you input a ridiculously high or low value, it might prompt further questions.Most insurers pay market value. But some policies used to say in the wording they'd pay market value or customer's value, whichever is lower. Not sure if some still do.
TwigtheWonderkid said:
If you input a ridiculously high or low value, it might prompt further questions.
Most insurers pay market value. But some policies used to say in the wording they'd pay market value or customer's value, whichever is lower. Not sure if some still do.
I've not seen one in my insurance buying experience over many years. When asked about the question (as I do), no-one has managed to give any kind of sensible answer as to why they ask that question. What a puerile game insurance buying is.Most insurers pay market value. But some policies used to say in the wording they'd pay market value or customer's value, whichever is lower. Not sure if some still do.
I had this when renewing the insurance on my Porsche 986 in January, went through all the details and website put the value at around £2500, I couldn't get a scrapped one for that. It did allow me to manually adjust it though to the correct value when I went from the comparison sight to the actual insurers website to complete the purchase, made no difference to the insurance cost.
I got the renewal quote from my bike insurer the other day.
£20 more than last year.
Looking through it I saw the value was still at the price that I paid for it new last year.
So I phoned them up, put the value down to the realistic price for a year old bike and it came down by £84.
Not all due to the value but the person on the phone said it made a bit of a difference.
davek_964 said:
The estimated value can affect your premium - but not in the way you might expect.
At my last renewal, the value for one of my cars was a bit high (still not a very big number, since it's an old car). I asked them to reduce it as part of the renewal discussion - the premium went up!
I once queried my insurance going up when the car was so old, and was informed that people with cars worth less than £1500 tend to be less bothered about them, and take more risks, park them in risky places etc. and therefore the premiums were higher. At my last renewal, the value for one of my cars was a bit high (still not a very big number, since it's an old car). I asked them to reduce it as part of the renewal discussion - the premium went up!
Changed my car for a similar power newer car worth 10 times as much, and my premium came down.
AndyNetwork said:
davek_964 said:
The estimated value can affect your premium - but not in the way you might expect.
At my last renewal, the value for one of my cars was a bit high (still not a very big number, since it's an old car). I asked them to reduce it as part of the renewal discussion - the premium went up!
I once queried my insurance going up when the car was so old, and was informed that people with cars worth less than £1500 tend to be less bothered about them, and take more risks, park them in risky places etc. and therefore the premiums were higher. At my last renewal, the value for one of my cars was a bit high (still not a very big number, since it's an old car). I asked them to reduce it as part of the renewal discussion - the premium went up!
Changed my car for a similar power newer car worth 10 times as much, and my premium came down.
I did ask the insurer at the time, and they said it happens fairly often but they didn't really know why. Was only £10 or something if I recall correctly, so no big deal really.
BertBert said:
TwigtheWonderkid said:
If you input a ridiculously high or low value, it might prompt further questions.
Most insurers pay market value. But some policies used to say in the wording they'd pay market value or customer's value, whichever is lower. Not sure if some still do.
I've not seen one in my insurance buying experience over many years. When asked about the question (as I do), no-one has managed to give any kind of sensible answer as to why they ask that question. What a puerile game insurance buying is.Most insurers pay market value. But some policies used to say in the wording they'd pay market value or customer's value, whichever is lower. Not sure if some still do.
98elise said:
It must factor in their risk profile otherwise they wouldn't ask. That's just how insurance works.
Yes indeed, but how? I often ask what they mean by value, and how would I know? Very strange. Do they compare what you say with a guide price they have for some reason? If you say it's worth £1,000 and the book price is £10,000 do they think they'll be ok to pay out less in a total loss? Dunnotony wright said:
Checking secondhand prices through AT there’s a minimum discrepancy of £2k. I assume this is due to the present inflated cost of used cars, but I'm now concerned that if I accept the policy and she totals her car in the next 12 months she will be a minimum of a couple of grand short to get the same car, would that be correct?
100% depends on the insurer. A friend with my help bought a bike, it was cheap because we bought it in winter and it had been sat for years, had no MOT etc. Insured it, declaring the value to be what she paid. A while later had an off and it was written off. The insurer only paid out the value she declared, despite this being far lower than *any* you could get in any condition as values of that model had risen in the mean time. She ended up being about £1k out from memory.
On checking the contract carefully it was clear that they would only pay out the lower of market value *OR* declared value.
This however is not the same for all insurance companies. So, check the contract carefully.
TwigtheWonderkid said:
Most insurers pay market value. But some policies used to say in the wording they'd pay market value or customer's value, whichever is lower. Not sure if some still do.
Not sure either, but I'd be surprised if a clause like that was upheld as fair by the Ombudsman in this day and age for a couple of reasons. First it's inherently asymmetrical; If the customer underestimates the value of his car he doesn't get it's true value if it's written off. That creates a pressure on him to err on the side of overestimating - which potentially means he ends up paying higher premiums than he needs to for no additional benefit.
And secondly the insurer has a much better idea of the value of a five year old Ford Focus than the average customer does - so it's surely better to use their own accurate estimate and ignore the wild guess that they forced the customer to input at point of sale.
(That's before we get into what happens if the value of the car rises after the policy starts, as has been the norm for a couple of years. Do we expect customers to monitor Auto Trader and update the insurer about the value of their car every few weeks? And anyway, we all know that Auto Trader ads are not an accurate guide to selling prices, so are we actually expecting customers to pay for access to trade guides so that they can input an accurate valuation on the proposal? Etc etc...)
IME, and I've been buying car insurance since 1984 is that they ask you for a value for 2 reasons:
1. To ensure you don't go over a certain threshold for their underwriters. I've often been asked to click on a box to accept that my car is worth than a certain amount (I think it was £20k or £25k). If you reckon it's worth more than that they may point you in the way of classic cover with guaranteed accepted value or just decline cover altogether.
2. So that a purchaser can't get what I think is called 'betterment,' That is, buy a car, get it written off by some skulduggery
and then claim for more than you paid for it. The chap above was very unfortunate about that claim it seems, they took advantage of the low purchase price, insurance companies eh?... If you improve a classic vehicle, you can ask for increased value cover with proof usually, even mid policy.
As it happens, I had a Lotus Excel stolen and written off in 2000 and they paid out more than I'd paid for it because in this case, it was a 'classic' policy with a value proposed by the owner's club and accepted by the insurer. Had to declare it for 3 yrs of course
(some now ask for 5 yrs claims) but it hadn't affected NCD being a classic policy.
There are stories of an E-type owner who had guaranteed value and got it when written off. But it hadn't been uprated over the years and so he'd have actually been better off with 'market value.' You get reminders now to upgrade cover if market rates appreciate.
1. To ensure you don't go over a certain threshold for their underwriters. I've often been asked to click on a box to accept that my car is worth than a certain amount (I think it was £20k or £25k). If you reckon it's worth more than that they may point you in the way of classic cover with guaranteed accepted value or just decline cover altogether.
2. So that a purchaser can't get what I think is called 'betterment,' That is, buy a car, get it written off by some skulduggery
and then claim for more than you paid for it. The chap above was very unfortunate about that claim it seems, they took advantage of the low purchase price, insurance companies eh?... If you improve a classic vehicle, you can ask for increased value cover with proof usually, even mid policy.As it happens, I had a Lotus Excel stolen and written off in 2000 and they paid out more than I'd paid for it because in this case, it was a 'classic' policy with a value proposed by the owner's club and accepted by the insurer. Had to declare it for 3 yrs of course
(some now ask for 5 yrs claims) but it hadn't affected NCD being a classic policy.There are stories of an E-type owner who had guaranteed value and got it when written off. But it hadn't been uprated over the years and so he'd have actually been better off with 'market value.' You get reminders now to upgrade cover if market rates appreciate.
Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff