Car value when getting insurance quote

[Deleted User]

It's always about finding the sweet spot. Buy a banger for £200 and they come back saying they don't insure cars less than £500. You put down £650 because you think it's worth that in your eyes and they charge you more than if you had put £500 down. Either way in a total write off they'll only pay out £420.

AdrianC

Grey_Critic said:

If I take my wifes engagement ring to be valued for insurance and they say £1,000 then I insure/pay a premium based on that figure. If it is stolen/lost etc the insurer does not offer me £500 they pay me the **insured value** why should your car be any different?

If you didn't take the ring to be valued by a professional, but simply self-declared a wet-finger value of £10,000, would you expect them to blithely pay that out?

When did you last take your car to be professionally inspected and valued?

If rings were so standardised as to be able to simply look up depreciated values based on make, model, age, documented amount of previous use - and those figures could be checked in an industry-standard price guide published regularly and researched from thousands of sales - wouldn't you expect them to use that figure first?

Grey_Critic

When I insure a vehicle and am asked for a value then the insurer sets a premium based on that. Does not matter if it is a £500 banger. If I say it is worth £10,000 then they can either accept that and set a premium accordingly or dispute the figure and say no. Interesting on some insurance proposals there is a note on the question of value **Not exceeding £75,000* so in theory you could state the £500 banger as any figure upto that limit being prepared to pay whatever premium they set. I know they do the market value thing but insurance is risk based - you insure *something* at a value agreed when taking it out. If you put it at the £75k then they charge you a premium based on that. My youngest son has just returned from the USA and his personal effects were packed and shipped to the UK including his art collection. The insurance premium was in excess of £3,000 which reflects the value that he placed on it.

Car_54

Grey_Critic said:

When I insure a vehicle and am asked for a value then the insurer sets a premium based on that. Does not matter if it is a £500 banger. If I say it is worth £10,000 then they can either accept that and set a premium accordingly or dispute the figure and say no. Interesting on some insurance proposals there is a note on the question of value **Not exceeding £75,000* so in theory you could state the £500 banger as any figure upto that limit being prepared to pay whatever premium they set. I know they do the market value thing but insurance is risk based - you insure *something* at a value agreed when taking it out. If you put it at the £75k then they charge you a premium based on that. My youngest son has just returned from the USA and his personal effects were packed and shipped to the UK including his art collection. The insurance premium was in excess of £3,000 which reflects the value that he placed on it.

In your son's case, the insurance was against loss or damage to the goods, so their value would have been the main factor in determining the premium.

Motor insurance is not like that: damage to the insured vehicle is only one of the risks covered. Its value is a relatively minor factor - the big claims are likely to be for damage to 3rd parties, especially those for personal injury.

jimbo6977

There are 2 reasons. 

One is a BS test - if you value you 10yo base model Fiesta at £20k, you're either very silly or more likely you have "forgotten" to mention all the modifications you've made.  

The other is more straightforward, ie the value will have a small effect on the premium, but for many insurers this only kicks in above a particular floor value, which will vary between insurers.