Car value up. Insurance, if total loss, how much paid out?
Discussion
Guys, never had this situation before. The car I bought 6 months ago has increased in value by at least 50%, up to 100% for a few. Obviously, when I insured it, I put down it’s value as what I paid. A few years ago, I was shunted up the rear on the M4, and got a payout of the current value at the time, about 50% of what I paid. Accepted of course, as I could’ve gone and purchased another identical car for that amount, and been back where I started. Now, if am unfortunate enough to experience the same again with my present car, do I get the value of the car, which I declared on the original insurance form (it’s not an agreed value by the way), to replace my loss, or do I get a sum to enable me to purchase the same again, recognising the increased market value(s) of the car?
robinessex said:
I can see two answers to this
1. You get what you paid, so suffer no financial loss
you don't unless you have gap etc1. You get what you paid, so suffer no financial loss
http://www.financial-ombudsman.org.uk/publications...
''To decide whether an insurer’s valuation is reasonable, we compare it with prices in specialist motor trade guides – called Parkers’, Glass’s and CAP. If the trade guides show significantly different prices, we’ll check the insurer hasn’t simply paid out the lowest.''
Saleen836 said:
I had to contact my insurer for my car last year as it's value had risen, I just called them up told them the new value and they made a small charge for the increase in premium
''People often have to give (or estimate) their vehicle’s value when they’re filling out their motor insurance application form. This isn’t actually the amount the insurer has to pay out – and we often have to clear up confusion about this.''Again only way is an agreed valuation insurance agreement to get the price you want, the value you put in is basically used for risk calculations.
Insurance is generally there to indemnify you in the event of a financial loss - in this case, your car. This means the insurer pays you to cover the amount you have lost financially. Whilst you paid less than the current value, it is deemed that the amount you 'lose' in this case is the amount you could reasonably expect to sell the car for (as this is difficult to ascertain, in reality the sale/advertised price of similar cars). It is not relevant what it was worth at inception, it's at the time of loss.
The Spruce goose said:
robinessex said:
I can see two answers to this
1. You get what you paid, so suffer no financial loss
you don't unless you have gap etc1. You get what you paid, so suffer no financial loss
http://www.financial-ombudsman.org.uk/publications...
''To decide whether an insurer’s valuation is reasonable, we compare it with prices in specialist motor trade guides – called Parkers’, Glass’s and CAP. If the trade guides show significantly different prices, we’ll check the insurer hasn’t simply paid out the lowest.''
''People often have to give (or estimate) their vehicle’s value when they’re filling out their motor insurance application form. This isn’t actually the amount the insurer has to pay out – and we often have to clear up confusion about this.''
_Marvin said:
Insurance is generally there to indemnify you in the event of a financial loss - in this case, your car. This means the insurer pays you to cover the amount you have lost financially. Whilst you paid less than the current value, it is deemed that the amount you 'lose' in this case is the amount you could reasonably expect to sell the car for (as this is difficult to ascertain, in reality the sale/advertised price of similar cars). It is not relevant what it was worth at inception, it's at the time of loss.
This is what I would expect. Find another car as near as possible to the deceased vehicle to meet the claim.
_Marvin said:
Insurance is generally there to indemnify you in the event of a financial loss - in this case, your car. This means the insurer pays you to cover the amount you have lost financially. Whilst you paid less than the current value, it is deemed that the amount you 'lose' in this case is the amount you could reasonably expect to sell the car for (as this is difficult to ascertain, in reality the sale/advertised price of similar cars). It is not relevant what it was worth at inception, it's at the time of loss.
the thing that you fail to mention is that they work the value out using ''called Parkers’, Glass’s and CAP.' Adverts are not necessarily reflective of current value. for specialist low sale cars this is especially prudent, again why agreed insurance valuation policies are used.robinessex said:
_Marvin said:
Insurance is generally there to indemnify you in the event of a financial loss - in this case, your car. This means the insurer pays you to cover the amount you have lost financially. Whilst you paid less than the current value, it is deemed that the amount you 'lose' in this case is the amount you could reasonably expect to sell the car for (as this is difficult to ascertain, in reality the sale/advertised price of similar cars). It is not relevant what it was worth at inception, it's at the time of loss.
This is what I would expect. Find another car as near as possible to the deceased vehicle to meet the claim.This is what Admiral have to say on the matter...
Market value
The cost of replacing your car, with one of a similar make, model,
year, mileage and condition based on market prices at the time
of the loss. Use of the term ‘market’ in which you would normally
shop for your car e.g. Retail value, will not apply if you bought
your car privately or at an auction. Non-European manufactured
cars will be valued based on European import values or the
nearest British equivalent
BertBert said:
robinessex said:
_Marvin said:
Insurance is generally there to indemnify you in the event of a financial loss - in this case, your car. This means the insurer pays you to cover the amount you have lost financially. Whilst you paid less than the current value, it is deemed that the amount you 'lose' in this case is the amount you could reasonably expect to sell the car for (as this is difficult to ascertain, in reality the sale/advertised price of similar cars). It is not relevant what it was worth at inception, it's at the time of loss.
This is what I would expect. Find another car as near as possible to the deceased vehicle to meet the claim.This is what Admiral have to say on the matter...
Market value
The cost of replacing your car, with one of a similar make, model,
year, mileage and condition based on market prices at the time
of the loss. Use of the term ‘market’ in which you would normally
shop for your car e.g. Retail value, will not apply if you bought
your car privately or at an auction. Non-European manufactured
cars will be valued based on European import values or the
nearest British equivalent
robinessex said:
So that says I can 'go shopping for a replacement car from dealers'.
Well it says what it says, and I don't think it says that. The clause that refers to the market value definition says that it's the most that gets paid out. Like many insurance Ts&Cs it's not terribly well drafted. But they still determine what they pay you, not you IYSWIM.Bert
BertBert said:
But I believe you are incorrect. Car insurance is not an indemnity. So what you paid for the car is not necessarily related to what the insurance company plans to pay out.
This is what Admiral have to say on the matter...
Market value
The cost of replacing your car, with one of a similar make, model,
year, mileage and condition based on market prices at the time
of the loss. Use of the term ‘market’ in which you would normally
shop for your car e.g. Retail value, will not apply if you bought
your car privately or at an auction. Non-European manufactured
cars will be valued based on European import values or the
nearest British equivalent
But his point is that if you went out to buy a car exactly like his now, it'd cost 50-100% MORE than he originally paid.This is what Admiral have to say on the matter...
Market value
The cost of replacing your car, with one of a similar make, model,
year, mileage and condition based on market prices at the time
of the loss. Use of the term ‘market’ in which you would normally
shop for your car e.g. Retail value, will not apply if you bought
your car privately or at an auction. Non-European manufactured
cars will be valued based on European import values or the
nearest British equivalent
So if they pay market value, they pay more than he spent.
This is different to the normal scenario, where the market value is lower than the purchase price. It's a pretty interesting question. Will the insurance company stand by a policy of "current market value" if that means paying more?
OP: Logically, your safest option is an agreed value policy, reviewed regularly.
I realised last year that the replacement cost of my Defender had risen massively over what I paid for mine, and risen considerably over what I had stated the value at. I called the ins co and increased the value. I understand fully the market value piece above, but didn't want them turning around in the event of a total loss and saying "yes Cappo, we realise you can't get one like that for less than £6k now but you said it was worth £3k so that's all you're getting".
Edited by CAPP0 on Friday 14th July 07:51
The Spruce goose said:
''People often have to give (or estimate) their vehicle’s value when they’re filling out their motor insurance application form. This isn’t actually the amount the insurer has to pay out – and we often have to clear up confusion about this.''
Again only way is an agreed valuation insurance agreement to get the price you want, the value you put in is basically used for risk calculations.
People familiar with the Ombudsman will be aware that before they modernised the link you used to make it more user friendly, that it contained this...Again only way is an agreed valuation insurance agreement to get the price you want, the value you put in is basically used for risk calculations.
"We are likely to award the consumer the full retail value – even if they inadvertently underestimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth. And we have seen exceptional cases where a vehicle’s value genuinely rose between the date it was bought and the date of the damage or theft."
dacouch said:
People familiar with the Ombudsman will be aware that before they modernised the link you used to make it more user friendly, that it contained this...
"We are likely to award the consumer the full retail value – even if they inadvertently underestimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth. And we have seen exceptional cases where a vehicle’s value genuinely rose between the date it was bought and the date of the damage or theft."
It is no different to using publications to work out a price, like glass's guide, parkers etc."We are likely to award the consumer the full retail value – even if they inadvertently underestimated the value of the vehicle when filling in the proposal form or luckily bought the vehicle for less than it was worth. And we have seen exceptional cases where a vehicle’s value genuinely rose between the date it was bought and the date of the damage or theft."
Another link http://www.financial-ombudsman.org.uk/publications...
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