Car Insurance linked to Leased Cars higher than it should be ?

RichyB71

I have a lease car with LeasePlan, now two years into the agreement. When getting an insurance quote, the value is listed as £48K (the original P11D value), but of course, the car is now worth much less. I believe using a lower value should result in a lower premium.

However, since I don’t own the car—LeasePlan does—I’m unsure what value they expect to be used. They won’t provide a specific figure, only the original £48K. I checked AutoTrader, and similar cars are valued at £33K, which leads to a significantly lower insurance premium.

What should I do? I don’t want to overpay for insurance unnecessarily, but I also want to ensure the lease company is covered in case of an accident. Has anyone else dealt with this, and what’s the best approach?

(Just to note: I’m not interested in GAP insurance—just a fair valuation for the policy.)

400ixl

Go and try some quotes, it will likely make absolutely no difference.

RichyB71

It certainly does, 

This years quote : £843.56 - based on £48K value
adjusted for £33K value - £698.73

SAVINGS - £144.83 

All I need is LeasPlan to say - please insure you car at XXXX and I know where I stand but they won't provide that information. Consequence is I over insure every year 

Car_54

As above.

First, the listed value is not what the insurer will pay out in the event of a claim: that will be the depreciated value immediately before the incident.

Second, whatever car you drive, the major risk for the insurer is the damage you may do to other vehicles or property, and especially personal injury to other road users.

The result is that the value of the insured car is a relatively minor factor.

cw8825

your not insuring the car for X value.
it is insured for the market value at the time f loss.
that number you enter is an approximate value, not how much will be paid out
there may be some differences ie 40k+ compared to 30k plus

IMO if the car is advertised on autotrader at 33k it is probably worth less
use 33k to be on the safe side

RichyB71

Many thanks to all

I'm hoping that you will see the dilemma. I don't own the car...LeasePlan do. If it was my car I'd insure it at the depreciated value. But it's not. LeasePlan won't inform me of what value they would seek in the event of an accident. I simply don't want to insure for £48K when they may only ask for £33K ? Hopefully thats clear 

RichyB71

Car_54 said:

As above.

First, the listed value is not what the insurer will pay out in the event of a claim: that will be the depreciated value immediately before the incident.

Second, whatever car you drive, the major risk for the insurer is the damage you may do to other vehicles or property, and especially personal injury to other road users.

The result is that the value of the insured car is a relatively minor factor.

The value is worth £150 to me. So not minor in terms of year in year out insurance costs. When an insurance company sends out an renewal document that displays an unadjusted value surely it's a method they use to extract the most they can from each policy 

born_again

RichyB71 said:

Many thanks to all

I'm hoping that you will see the dilemma. I don't own the car...LeasePlan do. If it was my car I'd insure it at the depreciated value. But it's not. LeasePlan won't inform me of what value they would seek in the event of an accident. I simply don't want to insure for £48K when they may only ask for £33K ? Hopefully thats clear 

What LeasePlan want & what the ins co will pay out are 2 different amounts altogether. 
Ins will assess car on it's value at the time of a write off. Nothing more, nothing less.

cw8825

RichyB71 said:

Car_54 said:

As above.

First, the listed value is not what the insurer will pay out in the event of a claim: that will be the depreciated value immediately before the incident.

Second, whatever car you drive, the major risk for the insurer is the damage you may do to other vehicles or property, and especially personal injury to other road users.

The result is that the value of the insured car is a relatively minor factor.

The value is worth £150 to me. So not minor in terms of year in year out insurance costs. When an insurance company sends out an renewal document that displays an unadjusted value surely it's a method they use to extract the most they can from each policy 

what car is it?

if you know £48k was the original value, not the current, you would be foolish to insure as you know that was the new value not how much it is worth now

DullGreyGuy

You are not buying a fixed price insurance policy so worst case scenario the insurer will pay you the lower of the declared value and the market value at the time of the loss. Best case scenario they will simply pay you market value irrespective of the declared value. 

In the insurers I worked for we did the later and the declared value was not part of the rating/pricing process, it simply drove some other matters (eg if we were willing to offer TPFT or not). As you are saying the price is changing it then sounds like you are looking at insurers that pay the lower of and so simply use a prudent (ie slightly high) estimated current value such that in the event of the a total loss you know the market value will be the lower of the two. 

RichyB71

DullGreyGuy said:

You are not buying a fixed price insurance policy so worst case scenario the insurer will pay you the lower of the declared value and the market value at the time of the loss. Best case scenario they will simply pay you market value irrespective of the declared value. 

In the insurers I worked for we did the later and the declared value was not part of the rating/pricing process, it simply drove some other matters (eg if we were willing to offer TPFT or not). As you are saying the price is changing it then sounds like you are looking at insurers that pay the lower of and so simply use a prudent (ie slightly high) estimated current value such that in the event of the a total loss you know the market value will be the lower of the two. 

Many thanks...

So given your background and experience in insurance, 

Quote A - based on full P11 value £48K - £843
Quote B - based on values I've seen for 2 year old TESLA Model Y - £33K - £698

Remember I don't own the car, Lease company do 

Which one do I go for ?