GAP Insurance - what value / DL insurance

raskazz

koexelek wrote: »

it just p~sses me off when you pay for an insurance policy, then it doesn't pay out fully.

It does pay out fully in accordance with indemnity, you will receive the market value of the car less the excess.

Being provided with a new car or the amount that you paid for the car exceeds indemnity.

Choose cover appropriate to your requirements. Not rocket science, really.

koexelek

raskazz wrote: »

It does pay out fully in accordance with indemnity, you will receive the market value of the car less the excess.

Being provided with a new car or the amount that you paid for the car exceeds indemnity.

Choose cover appropriate to your requirements. Not rocket science, really.

That all makes perfect sense, but surely what the person in the street wants is to be able to replace the 2005 Astra they lost, with another 2005 Astra, without having to put their hand in their pocket ( less the excess of course) ?

In a ideal world, car insurance would act like decreasing term assurance... A sum assured is agree up front, and it is agreed how this amount will reduce over the years with depreciation.
e.g. it is agreed by both parties that a car is worth £10000 at day one. If it is stolen in year two, the client gets £8000, year three, £7000 etc etc etc.

I seem to be the only one that has a problem with paying good money for a car insurance policy, getting the car stolen, claiming on the insurance,but still having to dig into my pocket to replace the car I had stolen with something similar

raskazz

koexelek wrote: »

That all makes perfect sense, but surely what the person in the street wants is to be able to replace the 2005 Astra they lost, with another 2005 Astra, without having to put their hand in their pocket ( less the excess of course) ?

And they can do this, as they will be paid the market value of the car that they lost.

If the person has finance secured on the car, as the loan will almost certainly be more than the market value of the car, they should buy GAP insurance to mitigate this risk.

Still not entirely sure why this is such a problem.

minimike2

For £12.50 a year, my insurer sets an agreed value on the car for the event of a total loss.

Now THAT is good value

koexelek

raskazz wrote: »

And they can do this, as they will be paid the market value of the car that they lost.

If the person has finance secured on the car, as the loan will almost certainly be more than the market value of the car, they should buy GAP insurance to mitigate this risk.

Still not entirely sure why this is such a problem.

I have no finance on my car, but I still took out gap insurance, as I know the main insurer won't pay me the market value if it gets stolen.

To me, it just seems a lost opportunity to the main insurer. Why not charge everyone more, but pay out an amount agreed in advance to a claimant ?
More people don't claim than do, so surely they would make more profit ?

I'm probably getting bogged down comparing car insurance to life insurance:o
At least with that they pay out the sum assured , rather than making you an offer and bartering

RabbitMad

koexelek wrote: »

I have no finance on my car, but I still took out gap insurance, as I know the main insurer won't pay me the market value if it gets stolen.

They will pay out the market value, it is just you probably have an inflated opinion as to what your car is worth; most of us do. I certainly do as I know exactly how much my car has been trashed / cared for and therefore I have a certain amount of peace of mind that I factor in to the value I place upon it.

However this is pointless because if it got written off or stolen the insurance company will only pay out the sum (Less excess) that they believe it would cost to replace my Garish orange 2005 Astra with FSH and 30,000 miles on the clock.

I love your idea of a fixed depreciation cost insurance policy but I think it would be impractical as lots of people chop and change insurers every year. Also what if you've trashed your car more than average, would you be more inclined to write it off in order to get more than its worth back?

As an aside - my brothers missus said to him the other day "I've got some good news and some bad news. which do you want first?"
He said "I suppose we should start with the good news"
"Ok, the air bags on your beemer definately work!"