Insurance valuations very low

fret_wimp2

just re-insured my car. They asked me the value and i gave an honest answer. they then told me cartell says its about 40% less valuable and thats all id get.

A quick check on carzone shows i was almost bang on with my estimate, but that makes no difference as their reference is cartell.

Is this standard practice?
i.e. my car on carzone is selling for 10k, cartell says its worth 6.5k.
How is the value not 10k?
(not real numbers but same proportions)

Eggs For Dinner

Carzone and the like show asking price. Market value is what the vehicle can actually be bought for. In the event of a claim, your specific car will be adjusted up or down from the norm, depending on spec, mileage, condition, extras etc.

grayzer75

When I go shopping for insurance and they ask the 'value' of the car I always tell the insurance company to quote at book value as that's the max they are going to pay out anyway. Any fairly new cars I've owed I got gap insurance to make up the difference.

Irish_peppa

I had assumed the cheaper you put the value on your car the better your quote would be. If the cars worth 5K but you say its worth 2K and you should in theory get a better quote as in the event of a claim they pay out less.

fret_wimp2

Irish_peppa wrote: »

I had assumed the cheaper you put the value on your car the better your quote would be. If the cars worth 5K but you say its worth 2K and you should in theory get a better quote as in the event of a claim they pay out less.

Right, but the point is the max they will pay out is their value from cartell, regardless of what value you have from anywhere else, and the cartell value is quite a bit less than the price visible for a similar car on carzone or a dealer.

So, should my car be written off, there is a sizable gap between what i get from insurance and what i would have to pay to buy a similar car.

grayzer75

It seems to be a common trend in Ireland with people over-insuring cars, houses, etc and the insurance companies are happy to take the premiums knowing that they never going to pay out to that value e.g. home/buildings insurance: an awful lot of people are paying premiums on the market value of the property rather than the cost to 'rebuild' - worst case scenario and the house gets burnt to the ground, the insurance company will cover the cost of the rebuild rather than give market value as the land is unaffected.

fret_wimp2

grayzer75 wrote: »

It seems to be a common trend in Ireland with people over-insuring cars, houses, etc and the insurance companies are happy to take the premiums knowing that they never going to pay out to that value e.g. home/buildings insurance: an awful lot of people are paying premiums on the market value of the property rather than the cost to 'rebuild' - worst case scenario and the house gets burnt to the ground, the insurance company will cover the cost of the rebuild rather than give market value as the land is unaffected.

But is it over-insuring if I insure for the cost to replace the item?

Shouldnt the payout value allow replacement of the item and not leave a sizable shortfall?

grayzer75

fret_wimp2 wrote: »

But is it over-insuring if I insure for the cost to replace the item?

Shouldnt the payout value allow replacement of the item and not leave a sizable shortfall?

Doesn't work like that - for a car you'll get book value and that's.

Another thing that happened to me brought insurance small print to light: I spent 900 quid on a TV in Currys and took out the instore insurance on it. 12 months later the TV fails beyond repair, I thought I would be getting a replacement TV to the value of 900 quid - wrong, I got a TV a similar spec of the original which were now retailing for approx 650 quid.

Insurance companies are about profit not customers.

fret_wimp2

grayzer75 wrote: »

Doesn't work like that - for a car you'll get book value and that's.

Another thing that happened to me brought insurance small print to light: I spent 900 quid on a TV in Currys and took out the instore insurance on it. 12 months later the TV fails beyond repair, I thought I would be getting a replacement TV to the value of 900 quid - wrong, I got a TV a similar spec of the original which were now retailing for approx 650 quid.

Insurance companies are about profit not customers.

by this logic though, the payout should let me purchase another car of similar spec, which is about 20% more expensive than the payout.

it really feels like im being legally mugged.

grayzer75

fret_wimp2 wrote: »

by this logic though, the payout should let me purchase another car of similar spec, which is about 20% more expensive than the payout.

it really feels like im being legally mugged.

Car insurance (especially in Ireland) is a minefield but the insurer will always pay the lowest value they can get away with. Caould you possibly use the information Revenue us for calculating VRT?

I know in the north you can refer your claim to Financial Ombudsman Service who have a team specifically dealing with insurance claims and it seems to keep insurers on a level playing field.

Eggs For Dinner

grayzer75 wrote: »

Doesn't work like that - for a car you'll get book value and that's.

Another thing that happened to me brought insurance small print to light: I spent 900 quid on a TV in Currys and took out the instore insurance on it. 12 months later the TV fails beyond repair, I thought I would be getting a replacement TV to the value of 900 quid - wrong, I got a TV a similar spec of the original which were now retailing for approx 650 quid.

Insurance companies are about profit not customers.

Every policy has always had the option for the insurer to replace the item claimed for, should they choose to. Since the bust in 2007, it is used more and more. It's function is to prevent fraud, rather than generate profit

galwaytt

fret_wimp2 wrote: »

But is it over-insuring if I insure for the cost to replace the item?

Shouldnt the payout value allow replacement of the item and not leave a sizable shortfall?

You're right: the purpose is in the event of a claim, that you should not be at a loss. That is the very raison d'etre of insuring anything.

But the Ins Co's do try and wriggle out of it, but you don't have to accept it. If your super-duper high value car is written off, but they can (literally) put a matching replacement on your driveway for 'less' than the value you had attached to your car, you aren't actually at a loss at all. You have a like-for-like replacement. Which is fine.

It's when they try to make you settle for a situation where you are at a loss, that's the problem. And that's where you fight them. Btdt, have the ....cheque

Basically, our car was hit by a 3rd party, and our insurer wanted to write it off and then pursue the other party (admitted full liability). However what our insurer 'offered' us was less than it would cost to replace it. Considering it wasn't costing our insurer a cent, that the 3rd Party would subsequently paying it, it shouldn't even have been up for discussion really.

Long story short, we cancelled the claim through our insurer, got legal with the 3rd Party's insurer directly, and got 100% settlement - some 30% above what 'my' insurer wanted to make us settle for.

'Serving the customer' my a4se.

Eggs For Dinner

You will find that the 3rd party insurer allowed a cushion in their settlement to you, so as to appease you and avoid an injury claim. This is something that wouldn't have been an aspect of the claim through your own insurer

galwaytt

Eggs For Dinner wrote: »

You will find that the 3rd party insurer allowed a cushion in their settlement to you, so as to appease you and avoid an injury claim. This is something that wouldn't have been an aspect of the claim through your own insurer

Fine by me, there was no question of any injury claim arising anyway. We were more-than upfront about that to the 3rd Party's insurer.

zg3409

grayzer75 wrote: »

people are paying premiums on the market value of the property rather than the cost to 'rebuild' - worst case scenario and the house gets burnt to the ground, the insurance company will cover the cost of the rebuild rather than give market value as the land is unaffected.

Off topic, you are correct but there are some caveats. Worst case you house 70% burns down, you need to demolish house, remove waste and rebuild new house exact same but up to current building regulations including insulation, fire safety etc. So the selling price of house has nothing to do with rebuild insurance cost.

If you undervalue there are risks too. Say you put rebuild at 200,000 and cost to rebuild is 250,000 you will not get 200,000 but only 4/5 of 200,000 or 160,000 with a rebuild cost of 250,000 so a gap of 90,000 with no insurance cover. So be careful undervaluing particularly for house, a car is not as big a deal. The usurers may you pay dearly for undervaluing

Eggs For Dinner

zg3409 wrote: »

Off topic, you are correct but there are some caveats. Worst case you house 70% burns down, you need to demolish house, remove waste and rebuild new house exact same but up to current building regulations including insulation, fire safety etc. So the selling price of house has nothing to do with rebuild insurance cost.

If you undervalue there are risks too. Say you put rebuild at 200,000 and cost to rebuild is 250,000 you will not get 200,000 but only 4/5 of 200,000 or 160,000 with a rebuild cost of 250,000 so a gap of 90,000 with no insurance cover. So be careful undervaluing particularly for house, a car is not as big a deal. The usurers may you pay dearly for undervaluing

Your theory is right, but your maths are wrong. In your example, you get 4/5 of your loss. Your loss is 250k, so you will get the sum insured of 200k (4/5) and you are deemed to self insure the remaining 50k. Substantial under insurance brings other issues