Toymods Car Club Inc: General Car Talk => Insurance company rip off!!!! (Read me!)

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7M-Brisbane
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Brisbane
Registered:
November 2002

Re: Insurance company rip off!!!! (Read me!)

Thu, 01 January 2004 08:41

Quote:

In my experience, most major in$urance companies will reduce the value of your car every year (unfortunately they don't really keep their policy prices in line with this).. Basically they do it because they can get away with it. Because not that many people will really stick up to them as you did.

Another case of someone who doesn't know what they are talking about kicking up a stink. The insured value offered on a car has very little effect on policy pricing. Something like 2% of insurance claims in Australia are actually 'total loss' claims (ie. the car's agreed/market value is totally paid out rather than the vehicle just being repaired).

Which means that 98% of the claims - and therefore 98% of the price you pay - are nothing at all to do with the value offered for the car. Your car can be worth five bucks... yet you can still cause $45,000 damage to a BMW if you don't see a stop sign... or $150,000 damage to an office building if you spin off a wet road.. or many many millions of dollars if you lose control into a car yard. So really the insured value itself means squat as far as pricing goes.

Values on cars are generally decreased on insurance policies every year. Why? BECAUSE THEY ARE WORTH LESS.

You should also consider the features of the insurance policy like coverage for towing, rental cars, windscreen coverage, what kind of claims service you'll be getting, that kind of thing. If anyone here had actually read their insurance documents, they would know that many companies offer up to $20million coverage against damage caused by you. Which means that even if your car is worth $100,000 it is still only half a percent of the amount that the company is insuring against.

And before anyone thinks they're really smart and points out that some companies charge more for Agreed Value than Market Value, or charge more when you ask them to increase their value, then there is a good reason for this:

If a company insures a car for more than they feel it is worth, they believe that the risk of a claim is much higher. If you know your car is insured for a great value, you'll be less worried about leaving it unattended in a carpark, or out in a storm. In addition, most companies would feel that fraud is more likely if a high payout figure is guaranteed on a car - if someone knows they're going to make money out of their car they are more likely to have it 'stolen'.

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