Car value up. Insurance, if total loss, how much paid out?

[robinessex]

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]

I can see two answers to this

1. You get what you paid, so suffer no finacial loss

2. You get a replacement car, so suffer no vehicle loss

Is that a Catch22 situtation?

[robinessex]

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 etc

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.''

In option 1, the insurance company could claim they've replaced my cash loss, so have settled, because in this instance, it's the lowest amount they would have to payout

[robinessex]

_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.

[robinessex]

Just for the hell of it, I stuffed in some car ads into WBAC. As anticipated, the values are way below the market prices being asked, and those cars do disappear fairly quickly from PH and Autotrader ads, I suspect not far off the asking price.

[robinessex]

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.

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

So that says I can 'go shopping for a replacement car from dealers'.

[robinessex]

Thanks for the reponses guys. I'm going to have a chat with the insurance compnay, it's looks as if I would be covered to the VALUE of the car at the time of any claim. But may go for an agreed value if it don't bump the cost to much.

[robinessex]

BertBert said:

But I still disagree. Indemnity insurance is a different thing. It is designed to put you in the position you were before the loss. Car insurance does not do this.

Which would require a near identical vehicle surely ?

[robinessex]

mike74 said:

I know we're in a bubble but I'm also very curious to know what car's value has increased 50-100% in just the last 6 months?

Jaguar XJR

https://www.pistonheads.com/classifieds/used-cars/...

Edited by robinessex on Sunday 16th July 08:31

[robinessex]

I picked the most expensive XJR currently for sale. Last year a 2006 model with 25, 000 on the clock was circa £18,000. Compare that to the example I’ve showed. If you drop down to the lower sector of the market, since last November, when I bought mine, prices have risen between 30% to 100%. And they do disappear from the dealers at the higher price. Mine cost £6,000. To replace now, same year and mileage, it’s £8000 to £10,000.

[robinessex]

The Spruce goose said:

well seems like you have done well. i know what i would do, probably sell bank the potential profit.

I walk for pleasure with the dog. I like driving the car, so I'll keep it thanks.

[robinessex]

Sebring440 said:

robinessex said:

Mine cost £6,000. To replace now, same year and mileage, it’s £8000 to £10,000.

Advertise yours now for £6000. See how many people beat a path to your door. This whole thread has been based on disinformation.

Pointless reply. I want to keep the car. If it should ever become a total loss, it'll cost me more to replace. I just wanted to know if the insurance would cover it. That was the question I was asking.

Identical car, but lower mileage, the nearest on PH at the moment. £11,900

https://www.pistonheads.com/classifieds/used-cars/...

Identical car, similar mileage, the nearest on Autotrader at the moment £7,600

http://www.autotrader.co.uk/classified/advert/2017...

Prices are a bit of a lottery on these cars now

Edited by robinessex on Monday 17th July 09:17