unfair payout for car insurance claim

Aretnap

akira181 said:

Does the payout not correlate to what you valued your car at when you got the insurance? 

If you lowballed it for a cheaper premium, then the payout will be lower than the value of the car (assuming the insurance don't declare the policy void).

If you highball it, would they not have to payout at close to that value since you've paid the premium to insure it at that value?

Most policies will pay market value at the time of the accident, full stop. The value you entered when you took it the policy is largely irrelevant, unless perhaps it is so far wrong that the insurer can credibly accuse you of trying to defraud then. Which is as it should be - the insurer knows the value of a two year old Toyota much better than the average customer does.

There are such a thing as agreed value policies which pay it a set amount which is agreed in advance, but they are not common, and are mostly for rare or classic vehicles which do not depreciate significantly over the length of a policy.

DullGreyGuy

Aretnap said:
There are such a thing as agreed value policies which pay it a set amount which is agreed in advance, but they are not common, and are mostly for rare or classic vehicles which do not depreciate significantly over the length of a policy.

It's typically less about depreciation over the course of a year and more to do with the fact the price range is so vast depending on the condition. Honest John currently has a 1970s "barn find" Mini for £1,995 whereas PistonHeads talks of one being sold (not owned by a famous person) from the same era for £155,000.

With such a spread it'd be hard to negotiate value if it was stolen not recovered etc hence the negotiation happens up front and the value is fixed. 

Did once look at introducing fixed value Motor for the mass market for a client but it looked like it would increase premiums by about £7.50 per year so they didnt go forward with it. Someone else offered to take the idea and launch the product but it would be equity not salary initially and couldn't afford to do that.