Not at fault collision

Sandtree

facade said:

AdrianC said:

They will pay market value for your car at the time of the collision... or the value you declared on your proposal, whichever's lower.

Since used car prices are insane at the moment, (WBAC are offering me £28,500 for the car I paid just under £20,000 for 3 years ago) should we be 'phoning our insurer on a weekly basis with an updated value?

If you want to get the £28,500 rather than the £15,000 you declared it was worth when you bought the policy this year then its worth at least one call.

Some insurers either ignore the declared value or use it for something basic like deciding if a tracker is mandatory or not but there are certainly some that will say its the lower of the two. Policies probably havent really considered the circumstances of where cars become an appreciating asset. 

Aretnap

Sandtree said:

facade said:

AdrianC said:

They will pay market value for your car at the time of the collision... or the value you declared on your proposal, whichever's lower.

Since used car prices are insane at the moment, (WBAC are offering me £28,500 for the car I paid just under £20,000 for 3 years ago) should we be 'phoning our insurer on a weekly basis with an updated value?

If you want to get the £28,500 rather than the £15,000 you declared it was worth when you bought the policy this year then its worth at least one call.

Some insurers either ignore the declared value or use it for something basic like deciding if a tracker is mandatory or not but there are certainly some that will say its the lower of the two. Policies probably havent really considered the circumstances of where cars become an appreciating asset. 

Hmmm... I'd question whether that's a fair term. It seems lopsided against the consumer; if he underestimates the value of his car he loses out, but presumably if he over estimates it he is over-charged for a policy which will still only pay out the market value, regardless of his estimate.

More importantly, the insurer almost certainly has a better idea of the value of (say) a five year old Ford Focus than the average customer is likely to. As the million and one threads saying "my insurer hasn't offered me a fair price for my car" demonstrate.

Certainly the FOS guidance used to say explicitly "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... 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." The current online version isn't as clear cut, but I'd hope that they'd still stick to this vary fair approach.

If my insurer didn't pay the full market value of my car because I'd made a good faith error in estimating its value, I'd definitely be complaining to the FOS about it.

Aretnap

AdrianC said:

[DELETED USER] said:

Don't expect them to pay what it costs to replace your car though.

They will pay market value for your car at the time of the collision... or the value you declared on your proposal, whichever's lower.

If you're claiming from the third party's insurer then the value you declared on the proposal is totally irrelevant - your dealings with your own insurer are no business of theirs.

If you're claiming from your own insurer then the value you declared on the proposal is still of questionable relevance, for the reasons above.

Sandtree

Aretnap said:

Sandtree said:

facade said:

AdrianC said:

They will pay market value for your car at the time of the collision... or the value you declared on your proposal, whichever's lower.

Since used car prices are insane at the moment, (WBAC are offering me £28,500 for the car I paid just under £20,000 for 3 years ago) should we be 'phoning our insurer on a weekly basis with an updated value?

If you want to get the £28,500 rather than the £15,000 you declared it was worth when you bought the policy this year then its worth at least one call.

Some insurers either ignore the declared value or use it for something basic like deciding if a tracker is mandatory or not but there are certainly some that will say its the lower of the two. Policies probably havent really considered the circumstances of where cars become an appreciating asset. 

Hmmm... I'd question whether that's a fair term. It seems lopsided against the consumer; if he underestimates the value of his car he loses out, but presumably if he over estimates it he is over-charged for a policy which will still only pay out the market value, regardless of his estimate.

More importantly, the insurer almost certainly has a better idea of the value of (say) a five year old Ford Focus than the average customer is likely to. As the million and one threads saying "my insurer hasn't offered me a fair price for my car" demonstrate.

Certainly the FOS guidance used to say explicitly "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... 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." The current online version isn't as clear cut, but I'd hope that they'd still stick to this vary fair approach.

If my insurer didn't pay the full market value of my car because I'd made a good faith error in estimating its value, I'd definitely be complaining to the FOS about it.

And as I said, certainly some insurers ignore it for vehicle valuations... in my claims days the only thing declared value drove was if a tracker was required; some vehicles always required one but if that wasn't triggered then a declared value of over £50,000 triggered the condition being added.

FOS ultimately looks at each case individually and will consider if its a new business or a renewal and you would imagine the scale of the difference... declaring £6k and it turns out to be £7k then absolutely but it turning out to be £30k and you are then in more broad questionable grounds under CIDRA anyway of if its possible to accidentally get it that wrong. 

Thesaltmustflow

Regarding market value and cost of insurance, on my latest renewal I 'correctly' valued imo my bike at 10K only to be told that the renewal price would be cheaper IF I renewed on last years valuation which was 11K? Everything on the policy exactly the same apart from another years NCB. 

I can understand why it went down because of the extra years NCB or I would have been happy if renewal price stayed the same but it's a total mystery to me regarding the valuation, I took the cheaper renewal price in the end, why wouldn't I 

Sandtree

Ultimately only the insurer will know why and its unlikely the front end staff will be told but...

1) Price promises - some insurers have marketing at times saying if you dont claim or change anything in the policy year that your renewal will be no more, less or something of that ilk, by making the value change that would mean the promise doesnt apply and you get current market rates

2) Grandfathered rates - even without price promises some insurers have a concept of grandfathering so you are shielded from certain rate changes as long as you dont change anything... if you do you get current market rates

3) Counter-fraud - notably over or under estimating your vehicles value are both fraud risk flags; most insurers arent very good at implementing systems around this but where fraud risk flags are identified it results in premium loading or refusal to quote

4) Commercial fit/ propensity modelling  - Insurers have a target market and have a view of whos likely to stick around for a long time... fit in those two categories and you get better pricing - pricing is not based on risk alone. Maybe they target people with bikes worth more than £10k