Can anyone explain how Insurance companies calculate maximum 'agreed value'

[MarkVS]

I have gone through a re-insurance process and trying to understand how insurance companies calculate their maximum of 'agreed value'.

I have a Pajero that I purchased just over 12 months ago. 03 NP diesel Pajero with only 100k km on the clock. I watched the market for a while, and purchased one that I thought was a good price at the time. I look at the market now, and the price that I paid is still a good price, both from dealers and private sellers alike.

When I ring insurance companies, wanting to have an areed value, and I am wanting to put an 'agreed value' that is what I paid for it....whcih I see as in line with what is for sale in the market...I can only get 1 insurance company to come to that agreed value...all the rest are much much lower....advising me that is their view of the curret market and hence the max value.

Is there anyone who understands how insurance companies work this out ? Are they looking at a different market than I am ? In the end, if the $ premium you are paying is based on the $ value of the car (ie..the premium goes up if the value of car...or $ risk goes up) why do insurance companies care what is the 'agreed value' set ?   

Confused

MarkVS

[HEM19X]

Mate, most insurance companies use an on line version of a "Red Book" or similar to value. This guide will have an upper value or a lower value which are based on many things including K's travelled etc BUT it they do not factor in all those extras that we 4WDers luv to add!

When it comes to AGREED values some companies have some ability to increase outside the guidelines but others do not. Also as there are numerous model variants, perhaps they do know understand exactly which one is yours.

As with anything it is best to shop around BUT just because you get the agreed value you want this year, you may see it drop dramatically next year & have to go through the whole exercise again.

Here is a link, which might help but it may cost you.

https://payment.redbook.com.au/cars/valuation-certificates/personal/car-details?ac=vd&v=Car&mx=cf&tp=pv&refer=GOOG#/{"cbo":{"cboMake":"4294949495","cboModel":"4294843008","cboYearGroup":"4294965738"},"range":{},"multi":{},"text":{"Keyword":"100000"},"tab":"valuation"}

[GU_Thomo]

And of course the primary method used is the one that lets them charge the most and pay out the least.

Cheers
Parry

[Bird]

We all go through this... every year and it gets draining in the end... Go with a broker.

The other issue you may find is there is a formula for maximum value of accessories to car.. you can only have accessories to the value of 10% (if your car is 10k, you can only have 1k in accessories as it was explained to me) with certain companies... WTF

Shannons and RACV are the only 2 that would come to the party with agreed value on mine without an independent valuation certificate (around $400 apparently).. I wasn't asking for new price, but the price it would cost me to replace the vehicle to where it is right now, which to me is what insurance is about.

YMMV

[MarkVS]

We all go through this... every year and it gets draining in the end... Go with a broker.

The other issue you may find is there is a formula for maximum value of accessories to car.. you can only have accessories to the value of 10% (if your car is 10k, you can only have 1k in accessories as it was explained to me) with certain companies... WTF

Shannons and RACV are the only 2 that would come to the party with agreed value on mine without an independent valuation certificate (around $400 apparently).. I wasn't asking for new price, but the price it would cost me to replace the vehicle to where it is right now, which to me is what insurance is about.

YMMV

Lost,
yeah..I ended up going with Shannons.....

One Insurance company told me o go with Shannons as they are a 'specialised' car insurer....whereas the others are 'general' insurers.

Mate, most insurance companies use an on line version of a "Red Book" or similar to value. This guide will have an upper value or a lower value which are based on many things including K's travelled etc BUT it they do not factor in all those extras that we 4WDers luv to add!

When it comes to AGREED values some companies have some ability to increase outside the guidelines but others do not. Also as there are numerous model variants, perhaps they do know understand exactly which one is yours.

As with anything it is best to shop around BUT just because you get the agreed value you want this year, you may see it drop dramatically next year & have to go through the whole exercise again.

Here is a link, which might help but it may cost you.

https://payment.redbook.com.au/cars/valuation-certificates/personal/car-details?ac=vd&v=Car&mx=cf&tp=pv&refer=GOOG#/{"cbo":{"cboMake":"4294949495","cboModel":"4294843008","cboYearGroup":"4294965738"},"range":{},"multi":{},"text":{"Keyword":"100000"},"tab":"valuation"}

Yeah..I figure Redbook comes into it...but even that I don't get as I see their valuations as being VERY different to what I see in the market place.

Other insurances seem to be very simplistic...and I can understand how they work.....whereas I can't quite get my head around how car insurance and 'agreed value' works.


  MarkVS

[Bird]

Yeah..I figure Redbook comes into it...but even that I don't get as I see their valuations as being VERY different to what I see in the market place.

Agree..
Try and find a 4.2 GU for the value that the book says... you just cant - not even close to it! Same with trade in values.. You can tell who backs the book, and it isn't in favour in any way of consumers..

[#jonesy]

Their is "redbook" and "glasses" which are the same and can be miles apart.
When I sold my ranger. Redbook was $15k. Glasses $22k. The market $20-25k.
I sold for just under 20 which I think was a bargain.

[Spada]

I found that when insuring my most recent purchace, agreed value of the vehicle was lower than market rate, but I was able to list and value all the accessories at replacement value. Doing it that way ballanced to total figure closer to what it should be.

When looking at the policy, there is usually a question along the lines of - 'has the vehicle been modified?"

Make sure you include ALL accessories,
bullbar
winch
spotties
cb
cb antenna
dif locks
dif breather
electronic rust protection
underbody spray
duel battery system
waterwatch desial filter
bash plates
tow bar
tow hitch
additional wiring
brake controler
long range tank
aftermarket suspension
air bags
side steps
roof rack
side awning
extra spare wheel & tyre
cargo barrier
floor mats
cargo mats
seat covers
steering wheel cover
dash mat
sat nav
scan guage
air compressor
window tinting
weather shields

etc, etc.......

If you have them listed on the policy as accessories, then the replacement value of these items needs to be added to the "agreed value" of the base vehicle.

In my case, I bought a second hand car that the previous owner had kitted out.  I went through a broker and got a policy that covers the car (at less value than I paid), was able to insure an additional $18k of specific listed accessories, which brings the total insured value up to what I paid.

[Bunyip]

They calculate the maximum 'agreed' value by putting a whole heap of number on a dart board and playing a round of darts.

[MarkVS]

They calculate the maximum 'agreed' value by putting a whole heap of number on a dart board and playing a round of darts.

Bunyip,
at least that makes sense 

[Barry G]

When I went through dealing with GIO for the payout on the Monterey they were working from 'Glasses Guide'.
The difficulty is that, for compulsory 'write off' purposes the extras arent calculated into the value of the vehicle, so any vehicle under about $10,000 in market value will almost always be a compulsory write off if the cost of repairs is close to that price.
However, at least in GIO's case, I got to remove the items I had added. (This included wheels with new tyres, as I had an identical set with old tyres to put on it.)
One thing to check is if your insurer will allow you to buy out the salvage. This wont allow you to repair and re-register (other than with an engineers certificate) but at least will give you lots of spare parts, if you buy a similar tug as a replacement.

[Bunyip]

Governments are also decreasing the % of repair$ v replace$ in an effor tto get older cars off the road (at least this is what the smash repairer told me).

It used to be for instance if the repair was greater than 85% of the insured value it would be a write-off, that figure has now come down. I do not know the exact figures, and this is not first hand knowledge but if I say it with enough conviction in could be true

[Bird]

surf ebay motorcycles and look at some of the "write offs"... I actually wonder if an assessor comes out to look at them. Few grand spent on them and you have a good $20k bike...  but they can never be registered again, thus why insurance goes up, cause of moronic laws.

[Barry G]

Governments are also decreasing the % of repair$ v replace$ in an effor tto get older cars off the road (at least this is what the smash repairer told me).

It used to be for instance if the repair was greater than 85% of the insured value it would be a write-off, that figure has now come down. I do not know the exact figures, and this is not first hand knowledge but if I say it with enough conviction in could be true

A classic example of 'unintended consequences'.
A law designed to stop young hoons from doing a 'cut and shut' on wrecked VN Commodores and the like, thus creating lethal weapons, catches all honest people with older and hence less expensive cars.
At the same time it is environmentally bad, because it effectively prohibits viable vehicles being repaired and re-used. (As Lost points out in his post.)
Also likely to lead to a reduction in the percentage of older cars insured, because it is solely the insurance process which 'catches' the car.  I.e. if my car hadn't been insured I could've kept it and fixed it myself.
I have checked insurance and been advised that they will not insure for just 'fire and theft' where the value is over $5,000. However, as soon as the value of the Equipe falls to that figure, I will change my insurance.  That way, in a repairable 'at fault' prang I will be able to get my car repaired, rather than have to strip and replace it. Will, of course keep 3rd party property cover as well.

[briann532]

Its a lot more scientific than that.

They calculate the amount of pharmacy's and grocery stores in your postcode.
They then calculate the amount of vaso delivered each month and how much per capita can be physically used.

Then they Bend ya over.................

It's insurance after all.

( I just renewed my car and camper policies and by changing insurer to NRMA I saved $861)

[Chris-Vi]

I was on the phone to NRMA tonight as they had our 08 Prado GX with an agreed value of $33,800. I told the woman that it wasn't enough and she had a look at their figures and came back with $41,000. Said I could pick a number in that range. Went for the max. Unbelievable. 

[Wato]

Mark
Good to hear you got the insurance sorted. Does Shannons cover you if you are off road?  Most insurers will only cover you if you are travelling on a gazetted road. Can be a bit of a trap.

Craig

[winniliss]

I went through Elders for my 2009 Prado 120 series GXL 6sp. Market value $38500 plus $24000 accessories. Other companies wouldn't insure me because I had modifications i.e 3in exhaust and others had a cap of $13000 for accessories etc depending on the market value of the vehicle.

[MarkVS]

Mark
Good to hear you got the insurance sorted. Does Shannons cover you if you are off road?  Most insurers will only cover you if you are travelling on a gazetted road. Can be a bit of a trap.

Craig

Craig,
the insurance covered me for driviing anywhere that the car is designed to go. They won't cover me of I am travleling in any sort of competition, training etc..but essentally, they said if I am going 4WD driving in a 4WD, then I am covered.

Mark