Insurance value question

T3rminator · 19-01-2017, 08:47 PM

Hi, I'm wondering if someone can help me out.

Say I have a car that MY insurance company values at $10k. I spend another $5k doing a few things to it. Ok, so if I have a prang and its my fault and its a write off, then my insurance will cover me for the $10k, and I lose out on the $5k I spent.

What happens if someone else is at fault and my car becomes a write off? Will the other driver's insurance go with the value ($10k) that my insurer gave me? Would there be any way to claim back the $5k additionally spent?

I'm asking because I'm trying to figure out how important "agreed value" is on a policy.

.:4:. · 19-01-2017, 09:06 PM

The agreed value is the agreed value. You agreed on 10k so even if not at fault you only get 10k. If you amend your policy and they also agree on 15k, then 15k it is regardless. A premium increase also happens.

xisled · 19-01-2017, 09:13 PM

If your talking about spending 5k on general repairs on the car. This would more than likely be considered as cost of owing a car. If you think it has increased the value of the car, call the insurance company and get your agreed value increased.

If you have a car accident and your not at fault and you claim through your insurance policy, and your car is deemed as a total loss, you will get paid out the agreed value of have on the policy. If you wanted more you would need to discuss this with the assessor at the time, but they could turn around and say no to any more money.

If you have an accident that not your fault, and you claim through the other person insurance, they will pay you out the market value of he car at the time of the claim. This may be lower than your agreed value.

T3rminator · 19-01-2017, 09:37 PM

Quote:

Originally Posted by xisled

If you have an accident that not your fault, and you claim through the other person insurance, they will pay you out the market value of he car at the time of the claim. This may be lower than your agreed value.

Ouch!! So what you are saying is, if it is someone else's fault, then your agreed value means nothing to the at fault person's insurer?!?!

This is the scenario I was trying to clarify.

.:4:. · 19-01-2017, 09:44 PM

Quote:

Originally Posted by xisled

If your talking about spending 5k on general repairs on the car. This would more than likely be considered as cost of owing a car. If you think it has increased the value of the car, call the insurance company and get your agreed value increased.

If you have a car accident and your not at fault and you claim through your insurance policy, and your car is deemed as a total loss, you will get paid out the agreed value of have on the policy. If you wanted more you would need to discuss this with the assessor at the time, but they could turn around and say no to any more money.

If you have an accident that not your fault, and you claim through the other person insurance, they will pay you out the market value of he car at the time of the claim. This may be lower than your agreed value.

I think you may be right. When my brother got t boned in his caprice that was insured for 6k (not at fault) he only got paid out 3k market value. He was blowing up that they changed his policy without being notified. Makes more sense now, but my opinion towards insurance company's is way down now

**GasoLane** · 19-01-2017, 10:55 PM

Quote:

Originally Posted by xisled

If you have an accident that not your fault, and you claim through the other person insurance, they will pay you out the market value of he car at the time of the claim. This may be lower than your agreed value.

Really? where did you read that?
I thought you would claim through your ins company, and they have to chase the other party.

It's not your place to chase the other party's insurance company, that's what you pay your company for.

xisled · 20-01-2017, 12:48 AM

Quote:

Originally Posted by T3rminator

Ouch!! So what you are saying is, if it is someone else's fault, then your agreed value means nothing to the at fault person's insurer?!?!

This is the scenario I was trying to clarify.

That's if you go directly through the other person insurance company without going through your own. If you decided to go down this path in a not at fault accident, it would be up to the insurance company assessor to decide the value of your car and they would pay you out this amount.

The reason for this is that you do not have an agreement with this insurance company and they only have to pay you out what the market value of the car is.

If you have a not at fault accident and claim through your own policy, then your insurance will pay you out depending on policy conditions, example agreed value or market value.

Also remember when taking out a market value policy, cars value usally drop every 4 to 6 weeks based on the guide the insurance company use. (Glasses guide)

My expirence is 5 years in insurance claims.

xisled · 20-01-2017, 12:56 AM

Quote:

Originally Posted by GasOLane

Really? where did you read that?
I thought you would claim through your ins company, and they have to chase the other party.

It's not your place to chase the other party's insurance company, that's what you pay your company for.

It's up to the individual what hey want to do, there is nothing saying you have to lodge a claim on your own policy.

A lot of people don't want to claim on their policy for what ever reason and make a decision to go through the other person claim. If they do this, then their insurance company has nothing to do with the claim you need to do all the follow up. But in most cases the other person insurance will recommend repairers and such to minimise repair costs.

How I know this is my 5 years working in motor claims.

chopstar87 · 20-01-2017, 01:11 AM

In this situation.. you have 2 options when not at fault in an accident when you have full comp, you can lodge a claim with your insurer, they will handle it for you, but the coverage of your car is limited by your policy.

2nd option is to chase the at fault party directly, when you follow this option your policy means nothing and they will settle you based on market value.. it may be more or it be less then your agreed value with the insurer.. take note spending 5k on your car may OR may not increase market value.

Also couple other things to take in consideration, when you lodge a claim with your insurer and the car is written off, the policy will be cancelled and the insurer may take ownership of any unexpired rego and policy (so no policy refund or if u pay monthly, they will deduct the outstanding amount from the settlement, so if you are 1 month in to the term at the time of the accident, 11 installments will be deducted from your settlement).. so check your policy about this. As this could affect your decision... where if you claim direct from the at fault party, you can call cancel your policy and rego and get a refund.

Itsme · 20-01-2017, 01:17 AM

If you have agreed value on your car then you will be only making claim with your own insurance, that is the point to maximise pay out if car is written off, why on earth would you go through the others drivers insurance to be paid market value!

chopstar87 · 20-01-2017, 01:18 AM

Also.. just a general fyi... review your renewal documents every year.. as things change.. and these documents are classed as the insurer advising you the changes and if you have selected an agreed value policy, the value automatically drops each year.. so you will need to make sure the amount each year is correct for your needs and car, if not call your insurer and increase.

This is coming from someone with 10yrs+ in insurance claims that is a current insurance claims supervisor.

xr8cam · 20-01-2017, 02:19 AM

Sue the person who hits you. Occasionally a court rules in favour of the victim. Not often, but if you present the right case anything is possible as it is all about interpretation of the law. I believe the case that won proved emotional loss to the owner of the modified custom car.

chopstar87 · 20-01-2017, 02:28 AM

^^ You would hope you have decent to excellent lawyer.. as you would be going against the insurance company's legal team and they dont mess around and know the game well!

barrys123 · 20-01-2017, 02:28 AM

Just insure it for what it's worth to you, mine a BF RTV was only $8,100 market value, but I got them up to $11,400 agreed value.

Fed · 20-01-2017, 09:05 AM

Other than TPPD I wouldn't insure a $10K car.

lra · 20-01-2017, 09:16 AM

I know this comment is a bit vague, but I remember a few years ago, (on a car forum) there was discussion about a rare BMW involved in a not at fault accident.
The car was deemed a financial write-off, so the owner took the other party to court claiming the full cost of the 'collector' value of the car, and its probable future value.
It became a bit of a long winded case, the lawyers probably loved it.
Don't know what the outcome was.
I suggest you ask your insurance company to clarify, in writing, 'agreed value'.

the_scotsman · 20-01-2017, 12:02 PM

Quote:

Originally Posted by Fed

Other than TPPD I wouldn't insure a $10K car.

I would. I insured my BF II Fairmont Ghia fully comp. if you can't afford to replace it with another, that's what insurance is for.

EWT · 20-01-2017, 12:53 PM

Spoke with AAMI who insure my 6Sprint.
They advised that if the car is a write off,
Firstly, they will attempt to replace it with another 6Sprint of similar condition / mileage etc.
Secondly, if none can be found, they would offer another vehicle of similar specifications. In this case, they mentioned as a possibility, an SSV Redline. If this is unacceptable to me, the remaining option is to pay out the agreed value on the contract as $62k in the first year.Will need to check and discuss what it will be in the second year.

xr8cam · 20-01-2017, 01:20 PM

I don't want to be on the road with people who believe insurance is a con or that cars of lesser value aren't worth insuring. You will want to have plenty of money in the bank if your at fault, because you'll be taken to court and sued. Why anyone would want the drama in their lives when they could have complete piece of mind for $25 a week is beyond me unless they want an excuse to waste money & be angry.The person who wrote my car off last year had no insurance, so just aswell I did and that car was insured for $5000. That $5k was in my bank in a week and went towards another car Had I have not had that, the idiot who hit me would have been ordered to pay me $5 a week. I know what I prefer.

Fed · 20-01-2017, 01:31 PM

I think TPPD insurance should be compulsory for rego just like CTP.

Better still make TPPD & CTP compulsory for people instead of cars so YOU are covered no matter what you're driving or doing for that matter.

Sabantien · 20-01-2017, 01:34 PM

Quote:

Originally Posted by Fed

Other than TPPD I wouldn't insure a $10K car.

Why not?

My old car was owned outright, then it got written off in a massive hail storm. Market value was just under 10k.

End result? I got given money to go buy a new car. No insurance? No car.

This may be different if you have a spare 10k cash to burn. In which case, it's unlikely you drive a 10k car.

Fed · 20-01-2017, 02:03 PM

Simple Sabantien, I guess you could say I 'self insure' the value of my own car and have done all my life. So far so good.

Itsme · 20-01-2017, 03:26 PM

Quote:

Originally Posted by Fed

Simple Sabantien, I guess you could say I 'self insure' the value of my own car and have done all my life. So far so good.

Too bad if other unexpected costs come into play, you might regret your actions, something to think about as accidents can have other ramifications.
Self insure does have limitations if not thought out properly.

Sabantien · 20-01-2017, 03:44 PM

Quote:

Originally Posted by Fed

Simple Sabantien, I guess you could say I 'self insure' the value of my own car and have done all my life. So far so good.

Fair enough. I can see that putting 10k in the bank as an insurance policy could work. If you don't need it you're collecting interest, if you do need it, the money is there.

Unfortunately not possible for everyone.

xr8cam · 20-01-2017, 04:43 PM

My sister in law hit a mercedes some time ago. She was at fault & had no comprehensive insurance. They went after her & as she was a student with a part time job to pay her rent, she had to declare herself bankrupt. She is now in her early 40's and has not held a licence since that incident 20 years ago as it caused her too much grief. All of this could have been avoided with insurance. It really needs to be compulsory unfortunately, to protect the good drivers from the morons who often are completely oblivious to the scene of carnage they leave in their wake.

hawke · 20-01-2017, 06:49 PM

There are two parts to a motor policy. The first part covers your vehicle, and the maximum payout is the sum insured - market or agreed value of the vehicle.

The second part is the liability component which covers property damage caused by the negilgance of the insured - it is often limited to $10 or $20 million.

If your loss is really $15,000 then your insurer should negotiate with the person who caused the loss (the tort feasor) or his insurer, and you should get the full amount of your loss. However, you will have to be able to substantiate that the real market value of your loss is indeed $15,000. An agreed value consideration is of no use, as a liability claim is based on the real value of your loss.

Mercury Bullet · 20-01-2017, 08:13 PM

Quote:

Originally Posted by EWT

Spoke with AAMI who insure my 6Sprint.
They advised that if the car is a write off,
Firstly, they will attempt to replace it with another 6Sprint of similar condition / mileage etc.
Secondly, if none can be found, they would offer another vehicle of similar specifications. In this case, they mentioned as a possibility, an SSV Redline. If this is unacceptable to me, the remaining option is to pay out the agreed value on the contract as $62k in the first year.Will need to check and discuss what it will be in the second year.

Yeah I have new for old too and I was wondering what would happen if it was written off.
Can I change that SSV for a 911?

last fairlane · 21-01-2017, 11:00 AM

We bought a second hand Territory Ghia AWD when it was 8 years old
and insured it for 20k agreed value with $500 excess
the next year it was valued at $14k and the year after it was valued at $11k
then after 5 years it went down to $9k and $700 excess
I had a go at them about whats the point of having agreed value
when you keep changing it and upping the excess as well as the monthly payments up each year that was with APIA so I swaped to Suncorp and cut my payments nearly in half the thing is Suncorp own APIA go figure

LTDHO · 21-01-2017, 06:58 PM

Quote:

Originally Posted by xr8cam

Sue the person who hits you. Occasionally a court rules in favour of the victim. Not often, but if you present the right case anything is possible as it is all about interpretation of the law. I believe the case that won proved emotional loss to the owner of the modified custom car.

This is Australia not America.

We have insurance here for a reason. Let the courts worry about rapists, murders, etc.

Correctly insurer your car or shop around to get the deal you like.

xr8cam · 21-01-2017, 08:03 PM

Quote:

Originally Posted by LTDHO

This is Australia not America.

We have insurance here for a reason. Let the courts worry about rapists, murders, etc.

Correctly insurer your car or shop around to get the deal you like.

The op asked the question. I am passing on something I read in another post. Just in case you didn't realise, criminal courts are for matters like the ones you mention. If I choose to sue you, it is all my cost and time in a civil claims court which operates separately. That's what courts are supposed to be for