Insurance: market value higher than agreed value
Discussion
What happens should one suffer a total loss and it turns out that the market/replacement value is in excess of your agreed value? Say the valuation was done a couple of years back and the market had risen, or you simply undervalued the car inadvertently. Would you get the market rate as per if you had not agreed the value? Hypothetical question.
swindler said:
What happens should one suffer a total loss and it turns out that the market/replacement value is in excess of your agreed value? Say the valuation was done a couple of years back and the market had risen, or you simply undervalued the car inadvertently. Would you get the market rate as per if you had not agreed the value? Hypothetical question.
not alot you can do, I have a 911 - insurance value is 40k and market is between 45-50k. Insurance value will always be below market as they factor in depreciation....... even if like mine its currently appreciating. you will almost never get the market rate, the best you will get is trade book value which for mine is about 30k. Trade book value is considerably less than market. The only time you will get market is if its a 100% non fault accident. This is due to the legislation entitling you to a car of equal standard to your pre-accident if a non-fault accident occurs. In this situation you can insist on your vehicle being repaired regardless of cost - even if it cost 100k on a car worth 20k. Most insurance companies really do not want this so they will pay up the market rate. - I had an incident with an insurance company trying to rip me off so insisted on a repair. It cost them about four times what the market currently was on that car lol
If you really have an agreed value policy, it will depend on the wording of the contract. Some index the AV to account for appreciation.
Most won't pay more than the AV.
Although there is no reason why you couldn't have an estimate as a collar. Bennetts use the estimated value as a cap, so will may Market up to Estimated.
The stuff above about trade value is mostly nonsense, the FOS guidelines suggest retail dealer price ( less a bit for negotiation) .
And the bit about "repair at any cost" is also wrong in 99.9% of cases. Ask in SP&L and I will give you the relevant case law.
So, real answer "depends on the contract". But most likely you will get the agreed value.
Most won't pay more than the AV.
Although there is no reason why you couldn't have an estimate as a collar. Bennetts use the estimated value as a cap, so will may Market up to Estimated.
The stuff above about trade value is mostly nonsense, the FOS guidelines suggest retail dealer price ( less a bit for negotiation) .
And the bit about "repair at any cost" is also wrong in 99.9% of cases. Ask in SP&L and I will give you the relevant case law.
So, real answer "depends on the contract". But most likely you will get the agreed value.
Noger said:
If you really have an agreed value policy, it will depend on the wording of the contract. Some index the AV to account for appreciation.
The stuff above about trade value is mostly nonsense, the FOS guidelines suggest retail dealer price ( less a bit for negotiation) .
So, real answer "depends on the contract". But most likely you will get the agreed value.
i have been unfortunate enough to have had no less than five cars written off (four were parked and one I was in but stationary). I have never ever got more than the trade, this is why I insisted on the last one being repaired, It was worth less as a Cat D but I ran it for another three years. This is why I now have agreed value on EVERY CAR I own. One of those was written off and I got the full agreed value plus got to keep the wreck which I broke up and sold for another 6k.The stuff above about trade value is mostly nonsense, the FOS guidelines suggest retail dealer price ( less a bit for negotiation) .
So, real answer "depends on the contract". But most likely you will get the agreed value.
james280779 said:
i have been unfortunate enough to have had no less than five cars written off (four were parked and one I was in but stationary). I have never ever got more than the trade, this is why I insisted on the last one being repaired, It was worth less as a Cat D but I ran it for another three years. This is why I now have agreed value on EVERY CAR I own. One of those was written off and I got the full agreed value plus got to keep the wreck which I broke up and sold for another 6k.
I've only ever written off one car, a Porsche 968 about 9 years ago.I paid IIRC 13k for it, maybe 14k I forget. However, the insurance payout was £1k more than what I paid, which was nice as it covered my £1k excess.
My understanding is that a write off, your fault or non fault, would pay their estimated (private) market value of the car. I would certainly not accept any less than that in any event.
My 911 is probably worth at a total guess, £60k to sell, and probably a good £10k less, maybe more, to trade. If I wrote off that car, and was offered a trade in value, I'd be livid, as would any owner of a particularly valuable vehicle!
I have only written off one car - I had been stationary for a few seconds when a car ran into the back of my car. The car was 3 years old when I bought it and it was written off 5 months later. The insurance pay out was £50 more than I paid for the car and paid for its replacement. I sent the insurance company copies of a number of advrets for very similar cars being sold privately and they paid me the average of the cheapest and dearest.
My daughter wrote off a 12 year old car and the insurance payout was prreety much what similar cars were being sold for privately.
I would expect the insurance payout for any car to pay for a car as close as possible in model, spec., mileage and condition. In other words, to put me back with as near as possible the same car as before the write-off. Or am I being naive?
My daughter wrote off a 12 year old car and the insurance payout was prreety much what similar cars were being sold for privately.
I would expect the insurance payout for any car to pay for a car as close as possible in model, spec., mileage and condition. In other words, to put me back with as near as possible the same car as before the write-off. Or am I being naive?
http://www.financial-ombudsman.org.uk/publications...
"In most cases, we assess the market value as the retail price which the policyholder would have had to pay for a comparable vehicle at a reputable dealer, immediately before the date of the damage/theft."
If you are merely getting trade, and not fighting it based on FOS guidelines, then you are a pillock.
"In most cases, we assess the market value as the retail price which the policyholder would have had to pay for a comparable vehicle at a reputable dealer, immediately before the date of the damage/theft."
If you are merely getting trade, and not fighting it based on FOS guidelines, then you are a pillock.
Noger said:
If you are merely getting trade, and not fighting it based on FOS guidelines, then you are a pillock.
That's my understanding - if you can't find a car for sale on the open market that matches your in condition/age/spec etc. for the amount they're offering, you tell them to bugger off. I've never had a car written off, but I know a few people who have and as far as I know only one of them accepted the insurance company's first offer; the others all had to argue but got at least the private market value of the car.
Interesting question this as we insure a lot of classics and their agreed values. Couple of background points - you can only get an agreed value on a classic car, the difficulty here is defining what is a classic, eg a modern morgan is classed and insured as a classic, but the general rule of thumb is that the vehicle has to be over 20 years old and cherished.
Agreeing the value of your vehicle with the insurer is a benefit when you feel the value is over and above what the market value is eg you have restored the vehicle or it has a rarity, documented history or pedigree to it.
However, this does raise an interesting point of where values of classics are rising, as they are at the moment, should you arrange an agreed value?
In the hypothetical situation the OP raises, the car owner would struggle to get back any more than the agreed value, even though market values were higher. They could get their broker to put a case to the insurer but would not be easy to do. The onus here is on the owner to realise that their car is not insured for enough and to increase that at renewal.
So this does lead me to think that if you have a 'standard classic' when classic values are rising, there is not much benefit to having an agreed value. Conversely when values are falling, it would pay to do so.
With regard to your everyday private car, as others have said, in the event of a total loss you are entitled to the market rate and if your insurer has not offered that, then put together a case of what your vehicle is currently selling for and go back to them.
Agreeing the value of your vehicle with the insurer is a benefit when you feel the value is over and above what the market value is eg you have restored the vehicle or it has a rarity, documented history or pedigree to it.
However, this does raise an interesting point of where values of classics are rising, as they are at the moment, should you arrange an agreed value?
In the hypothetical situation the OP raises, the car owner would struggle to get back any more than the agreed value, even though market values were higher. They could get their broker to put a case to the insurer but would not be easy to do. The onus here is on the owner to realise that their car is not insured for enough and to increase that at renewal.
So this does lead me to think that if you have a 'standard classic' when classic values are rising, there is not much benefit to having an agreed value. Conversely when values are falling, it would pay to do so.
With regard to your everyday private car, as others have said, in the event of a total loss you are entitled to the market rate and if your insurer has not offered that, then put together a case of what your vehicle is currently selling for and go back to them.
warp9 said:
Interesting question this as we insure a lot of classics and their agreed values. Couple of background points - you can only get an agreed value on a classic car, the difficulty here is defining what is a classic, eg a modern morgan is classed and insured as a classic, but the general rule of thumb is that the vehicle has to be over 20 years old and cherished.
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Nope, Hiscox and other HNW insurers will quite happily give you Agreed Value on your new car. Couple of conditions, but vehicle age isn't one of them...although drivers age often is..
Ozzie Osmond said:
If you have "agreed" the value for insurance purposes then that's the bottom line. No use going along later and saying oooh my car was worth more than that.
Depends on the policy. In HNW household policies there are automatic indexations for works of art if the artists dies in the policy year. So there is a precedent. Although the only practical example I can think of is "new for old" cover, so if agreed value is less than what you paid, and you have "new for old" then you would still get a new car.
My classic was written off in a 100% no-fault accident. I had an agreed value on my insurance which was, I came to find, quite a bit under the replacement value. I claimed through the other person's insurance company. They sniffed around for my agreed value but I wouldn't tell them. They offered a paultry £25k but eventually settled with me on £50k!
This was because I, quite strongly, objected to their insulting offer, provided a long list of similar cars showing much higher pricing. I also told them it was their client's reckless driving which had put me in this position and that my car was arguably unique so I could insist on a £100k rebuild.
They settled within a day of my phonecall and e-mails.
This was because I, quite strongly, objected to their insulting offer, provided a long list of similar cars showing much higher pricing. I also told them it was their client's reckless driving which had put me in this position and that my car was arguably unique so I could insist on a £100k rebuild.
They settled within a day of my phonecall and e-mails.
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