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Unfortunately, you and the insurance companies are on the same page when it comes to agreed value.
Let's say you just purchased a new $40,000.00 vehicle.
You don.t insure it with the value equal to what you just paid for the vehicle.
Now, two or three months later, the car is totaled.
The insurance co says the vehicle is no longer worth what you paid for it only a short three months ago.
So, you settle for what the insurance company dictates, and are now out some big bucks.
On new vehicles, many insurance company policies will pay out on a total the new purchase price of a recently purchased vehicle. Typically, full replacement for the first year.
Had you and the company agreed on a figure before hand, you would have been paid that agreed figure.
Now as for the added cost of insuring with agreed value, your comment doesn't hold water.
My Dakota pickup,insured with full coverage, cost me $1080.00 a year for coverage, with no agreed value.
My classic Tbird also has full coverage with an agreed value, and the yearly cost is $221.00 (this is not a typo)
OK, you're using a company such as Hagerty, which specializes in collector car coverage. That's who I use for my collector cars, with similar rates to what you quote. But the policy stipulates limited "pleasure" use of the vehicle, for meets, shows, or infrequent "sunday driving" type use. None of them can be used as a "daily driver" transportation vehicle, which is the coverage for a normal policy; I note that my regular transportation and farm use vehicles require that I declare their primary useage so that the underwriters can determine which vehicles will have the most exposure/use.
Obviously I am not being charge extra for an agreed value, and my classic is not insured my one of the better known companies like AAA, Farmers, Geico.
I'll bet that if you did insure with one of the majors you mention, with a declared use as main driver car for your commute to work and an agreed value, that you'd pay a premium price for that.
It is insured with a company that only insures collector, and classic vehicles.
Still, they could charge extra for an agreed value, but they don't.
As for every car being somewhat alike, that should make it a lot easier for the insurance companies to come up with an agreed value when writing a policy.
The only reason you never see agreed value on a policy from the bigger companies is because they don't want to offer it .
They certainly do, and they happily will quote the coverage and collect the premiums after you document the condition of the car and have it inspected by one of their adjusters to ascertain that it is not a regular car coverage situation. I've asked for it from my various insurers through the years ... since many of my daily drivers were collectable MB's and BMW's ... been there more than once. I speak from experience, not guesswork. Had the same thing with several of my rarer motorcycles, too ... a 1958 Zundapp KS601EL, '66 Ducati Mach 1, and a '64 Matchless G15CSR Dunstall.
If enough people walked out the door because they couldn't get an agreed value when insuring, the insurance companies would soon change their attitude.
Bob.
Sorry, Bob ... but I've been around the collector car biz for over 45 years now, and I've dealt with declared value policies on collectable cars, too. You are misleading the OP when you assert that you get full coverage at a declared valuation so inexpensively on your T-Bird without disclosing that it's a specialty insurance policy issued by a company that serves the collector market place with very limited driving use provisions. You'd have a big problem getting a payoff from them if you were in an accident with the car in inclement driving conditions heading to work on a day instead of to a meet or car show ... it would be a violation of the limited driving use coverage, and they could decline to pay out anything on your vehicle loss.
Proof of the pudding here, so to speak ... would be that if you could get such a smokin' deal on your Dakota pick-up ... you'd be getting the same declared value policy for a few hundred bucks instead of paying $1,080.00 for a policy without a declared valuation. You could get a declared value policy on your Dakota, but the premium would be higher than what you're paying now if the valuation was above the normal FMV range for that vehicle. Insurance companies aren't stupid, they know how to assess risk and potential payouts and charge for that coverage. The insurance companies specializing in collector cars take it as good faith that you are as fanatical and fastidious about your "special" collector car as you could possibly be ... and rate their risk on the basis that you'll not be driving it in snowstorms or taking it up dirt/gravel roads in a rainstorm just for the heck of it; they assume that you will be very protective of your toy.
And yes, I've seen the results when folk got caught by their insurer using a car as a daily driver that they'd insured under a collector policy ... like a Ferrari that one fellow used to commute to a home in the Colorado mountains many days of the week. His Denver parking garage attendents were able to verify that was the car he used on a lot of days, even when it was forecast for snowstorms and icy roads in the foothills while Denver might be reasonably clear. He stuffed it into a tree late one mid-week evening in April and the insurance company investigated the circumstances ... and declined to pay out anything on the totalled car because it wasn't insured as a daily driver, it was a "collector" car policy.
But you don't have one of those smokin' deals on your Dakota ... you get a regular $1,080 policy on it because you can't get a collector limited driving use specialty policy on it as a driver.
And the OP can't get a collector policy on a common daily driver, either, for normal transportation driving.
Sorry, Bob ... but I've been around the collector car biz for over 45 years now, and I've dealt with declared value policies on collectable cars, too. You are misleading the OP when you assert that you get full coverage at a declared valuation so inexpensively on your T-Bird without disclosing that it's a specialty insurance policy issued by a company that serves the collector market place with very limited driving use provisions. You'd have a big problem getting a payoff from them if you were in an accident with the car in inclement driving conditions heading to work on a day instead of to a meet or car show ... it would be a violation of the limited driving use coverage, and they could decline to pay out anything on your vehicle loss.
Proof of the pudding here, so to speak ... would be that if you could get such a smokin' deal on your Dakota pick-up ... you'd be getting the same declared value policy for a few hundred bucks instead of paying $1,080.00 for a policy without a declared valuation. You could get a declared value policy on your Dakota, but the premium would be higher than what you're paying now if the valuation was above the normal FMV range for that vehicle. Insurance companies aren't stupid, they know how to assess risk and potential payouts and charge for that coverage. The insurance companies specializing in collector cars take it as good faith that you are as fanatical and fastidious about your "special" collector car as you could possibly be ... and rate their risk on the basis that you'll not be driving it in snowstorms or taking it up dirt/gravel roads in a rainstorm just for the heck of it; they assume that you will be very protective of your toy.
And yes, I've seen the results when folk got caught by their insurer using a car as a daily driver that they'd insured under a collector policy ... like a Ferrari that one fellow used to commute to a home in the Colorado mountains many days of the week. His Denver parking garage attendents were able to verify that was the car he used on a lot of days, even when it was forecast for snowstorms and icy roads in the foothills while Denver might be reasonably clear. He stuffed it into a tree late one mid-week evening in April and the insurance company investigated the circumstances ... and declined to pay out anything on the totalled car because it wasn't insured as a daily driver, it was a "collector" car policy.
But you don't have one of those smokin' deals on your Dakota ... you get a regular $1,080 policy on it because you can't get a collector limited driving use specialty policy on it as a driver.
And the OP can't get a collector policy on a common daily driver, either, for normal transportation driving.
All good points but, restricted mileage depends on the insurance carrier.
My insurer for the bird allows me to drive anywhere I want, and has a mileage tier of 7000 miles per year.
I am not limited to cruising nights and shows.
I could, if I wanted too, drive my classic to the market, doctor's office, or whatever.
As for the 7000 mile limit, that is more than fine with me.
I don't think I put 3000 miles a year on it.
I don't drive around much like I did when I was younger.
My Dakota just turned 52000 miles, and it is a 2002.
That figures out to be about 4300 miles a year.
I feel strongly that all insurance companies could, and should offer an agreed value for any vehicle they insure.
Some,as stated in another post, offer full replacement of a new vehicle, but that only covers the short time after the vehicle was purchased.
What about those that have a two, or three year old, low mileage vehicle.
If they get into a accident where the vehicle is totaled, they take a big hit in the wallet, and that just isn't fair.
Insurance, be it auto, home, or health, is a crapshoot at best.
Every one is gambling they will never need to file a claim on it, but the reality is, people DO file claims, and the insurers should be a lot more fair in their assessments when it comes to value of the insured.
Bob.
I feel strongly that all insurance companies could, and should offer an agreed value for any vehicle they insure.
Some,as stated in another post, offer full replacement of a new vehicle, but that only covers the short time after the vehicle was purchased.
What about those that have a two, or three year old, low mileage vehicle.
If they get into a accident where the vehicle is totaled, they take a big hit in the wallet, and that just isn't fair.
Insurance, be it auto, home, or health, is a crapshoot at best.
Every one is gambling they will never need to file a claim on it, but the reality is, people DO file claims, and the insurers should be a lot more fair in their assessments when it comes to value of the insured.
I've refrained from commenting on your "agreed value policy" idea because I don't know much about it. Personally, I'm quite skeptical this is a practical idea for anyone--who as the previous poster pointed out--does not own a "collector vehicle".
There is a reason why "fair market value" is the insurance industry standard for a payout on cars that are totaled in an accident. That reason is not that the insurance companies are out to "gouge" everyone in sight. The reason is that the insurance company does not want to be in a position where people have an incentive to wreck their cars in an accident because the payout they would get from the insurance company is greater than what the car is actually worth. Can you imagine how many people would wreck their cars to make money if that were possible? I'd be particularly nervous in a bad economy. If I were an insurer, I'd be wanting to know who had just lost a job or who had a sick family member in the hospital with insufficient money to pay their medical bills.
As an accident attorney, I often, often disagree with insurance companies. However, they are right about some things. They are correct that we should never create situations where people can make money by deliberately destroying property or causing an accident.
My experience with insurance companies when it comes to the issue of payout on a total loss has not been a bad one. I've seen people with fifteen and twenty year old vehicles get appraisals that were far more than I would ever pay for their car if I were buying it. Most insurance companies recognize that failure to make a fair settlement on a total loss to a car can have other consequences for them later. For example, the person with the "slightly sore neck" than decides he needs to visit a chiropractor or physical therapist 30 times and ends up making a bodily injury liability claim for $15,000.
On the other hand, I've seen people who with a straight face will try and tell an insurance company that their 1992 Toyota Celica is worth twice what any other 1992 Toyota Celica is worth. Than they become irrationally angry when the insurance company doesn't agree with them.
Even if "agreed value" policies were the industry standard, there will always be arguments over depreciation. Not all vehicles depreciate at the same rate. Some quality cars hold their value far better than others do. This would always be a bone of contention.
In the final analysis, insurance policies are subject to market forces just like any other good or service is. If "agreed value" was a good way to go, more insurance companies would be offering it. I virtually never see it in my practice.
[quote]There is a reason why "fair market value" is the insurance industry standard for a payout on cars that are totaled in an accident. That reason is not that the insurance companies are out to "gouge" everyone in sight. The reason is that the insurance company does not want to be in a position where people have an incentive to wreck their cars in an accident because the payout they would get from the insurance company is greater than what the car is actually worth. Can you imagine how many people would wreck their cars to make money if that were possible? I'd be particularly nervous in a bad economy. If I were an insurer, I'd be wanting to know who had just lost a job or who had a sick family member in the hospital with insufficient money to pay their medical bills.[quote]
Wow, you don't actually believe what you posted here do you?
People are going to risk life and limb to collect more money than the car is worth by totaling it?
Do you actually know how fast a vehicle needs to be traveling, and how great of an impact it takes to total a vehicle in an accident?
I think you really need to re-think your statements.
Bob.
(snip)
Do you actually know how fast a vehicle needs to be traveling, and how great of an impact it takes to total a vehicle in an accident?
(snip)
Bob.
You're kidding, right? You focus on accidents ignores insurance loss claims which justify totalling out vehicles from an insurance perspective.
Even at that, I've seen vehicles totalled out in an accident that weren't traveling 5-10 mph in curb hits, fender benders, or single-car excursions off the road in inclement conditions ... because the extent of the cosmetic and/or structural damage was enough to justify totalling the car rather than the repair cost. A not too-uncommon scenario here in the Rocky Mountain states is a driver losing control on an icy road in gusty winds and taking an excursion off the roadway onto the adjacent graded/paved area ... then sliding sideways up onto the roadway, and then off again. Tears up suspension components, wheels & tires, bends framework structure to a point where a car can be totalled. According to a WYHP friend, it's common enough to be one of the single leading causes of single car accidents and sometimes, fatal ones when a car rolls as the driver attempts to get back on the roadway from the adjacent berm ... even if only a couple of tires have left the roadway.
Another factor is median barriers designed to keep the vehicle in contact with the barrier. I've seen cars scraped so badly from these encounters, damaging them all the way from the front hood to the truck, including an entire side of the car. Doesn't have to be fast or violent, the car just has to damage every panel along the way to be a very expensive repair ahead.
Or, cars that weren't even moving ... with extensive hail damage which can be severe in our area.
As well, I've seen many vehicles totalled out that had no collision accident damage ... simply were paid out on a loss claim which then mandated that they be issued an S title afterwards.
It's all a matter of cost to insured valuation. If it costs more than a certain percentage to repair a car that has sustained damage, then it will be totalled per the insurance company's policy and right to do so, or if the car has been subject to a loss payout claim, then the insurance company will total it.
Quote]simply were paid out on a loss claim which then mandated that they be issued an S title afterwards.[quote]
Now, in order for a loss claim to be awarded, there had to have been some physical evidence to back up that loss.
If nothing has happened to the vehicle, then how on earth could a loss claim be filed?
Again, all your points go right back to the need for an agreed value concept when insuring a vehicle.
I don't care if while driving, your vehicle rolled off the face of the earth.
If a value was set on your vehicle at the time of insuring it, the insurance company would be legally bound to pay that value minus depreciation at the time of the accident, not after the fact.
This would apply only in a total vehicle accident, not one that could be fixed at a body shop.
If it cost more to repair than the agreed value set at the time of writing the policy, then that agreed value has to be paid by the insurer, less depreciation which would have to be a fair market value, determined by retail value at the time of the initial accident.
We are not talking body shop here, we are talking total loss, and that loss should be agreed on from the inception date of any policy.
This BS about people risking their lives to collect on an agreed value is not even worthy of a statement in response.
Bob.
[quote=CALGUY;24761501]Quote]simply were paid out on a loss claim which then mandated that they be issued an S title afterwards.
Quote:
Now, in order for a loss claim to be awarded, there had to have been some physical evidence to back up that loss.
Absolutely. A stolen vehicle report to the police and a missing vehicle claim can be the basis for a total loss claim. I've seen this happen with everything from a vehicle that had a mysterious disappearance to one ... as I described above ... had the keys in it and the engine running at a C-Store stop by the owner. After a reasonable amount of time and no recovery of the vehicle, the insurance companies paid out a total loss on the car. Some time after that payout, the vehicle was recovered and put back on the road with an "S" title.
If nothing has happened to the vehicle, then how on earth could a loss claim be filed?
Do I need to repeat these circumstances of insurance total loss claims to you again? See above response.
Again, all your points go right back to the need for an agreed value concept when insuring a vehicle.
Not in the slightest. Particularly in the case of decade old high first cost cars which have depreciated like a rock in the later years. You can't go out and buy a new one with the valuation of a 10-year old top of the line 'benz or BMW, but you can find lots of similar decade old ones at the FMV depreciated price.
I don't care if while driving, your vehicle rolled off the face of the earth.
If a value was set on your vehicle at the time of insuring it, the insurance company would be legally bound to pay that value minus depreciation at the time of the accident, not after the fact.
"that value minus depreciation" might just happen to be Fair Market Value.
This would apply only in a total vehicle accident, not one that could be fixed at a body shop.
If it cost more to repair than the agreed value set at the time of writing the policy, then that agreed value has to be paid by the insurer, less depreciation which would have to be a fair market value, determined by retail value at the time of the initial accident.
Not quite. The estimated cost of repairs to a vehicle only need to exceed a certain percentage of the value threshold to be considered a "total loss". The cost of repairs do not have to equal or exceed the value of the vehicle.
We are not talking body shop here, we are talking total loss, and that loss should be agreed on from the inception date of any policy.
This BS about people risking their lives to collect on an agreed value is not even worthy of a statement in response.
Bob.
While I'm not the poster with what you regard as "BS about people risking their lives to collect on an agreed value" ...
I've seen insurance fraud of this type in the automotive, aviation, marine, and home owner's insurance policies where people looked upon this as a way to achieve wealth creation. As well, people have "faked" their demise in numerous ways that turned out to be seriously debilitating injuries. Or people have "faked" automotive accidents for a fee, just to get a percentage of the insurance pay-outs ... and California has a less than stellar history of these types of "minor accidents" as a fraud business.
In fact, my Dad was hit by a motorcyclist some years ago in exactly that type of fraud scheme in Agoura. The motorcyclist, a house painter who wanted some vacation money and time off from his job, deliberately crashed into my Dad's car (an older Mustang II). The fellow had a toolbox of wrenches and such bungee corded onto his handlebars, which broke loose and struck the guy in the chest before it bounced off through the rear window of the car, scraping the trunk lid in the process. The bike was totalled, and my Dad's car was found to need about 75% of it's FMV to repair it, so the insurance companies totalled the car. We were concerned that the fellow would sue my Dad for his "accident" and injuries, because numerous "witnesses" to the crash asserted that it was my Dad's fault ... stopped at an intersection for a red light. The guy did file suit with all kinds of physical injury claims, loss of work and income claims, pain and suffering, loss of consortium, pyschological claims ... scared to be out in traffic again, etc. Not only did we find him working as a housepainter within a month (spray rig on scaffolding, 2-3 story houses), but traced his prior half-dozen claims of major physical injuries in other motorcycle fraud accidents; claims in each one were for long recovery times, major injuries, unable to work in his trade, etc. Only this time, he really did get injured with the flying toolbox. What was really hilarious about his claims was that at the scene of the accident, he looked like a '60's hippie just down from Berkeley ... beard, sandals, beads, waist-length tied back hair, tie-dyed shirt, etc., and he was an low-paid hourly unskilled housepainter ... but when he filed his claims, his "employer" (house painting contractor) asserted that he was a $100,000/year salaried + commission lead painter and crew foreman, very essential to the success of the painting business. He later showed up in court dressed in a Brooks Bros 3-piece suit looking like a top-drawer lawyer, nice wingtips, and with the cleanest shave and haircut you'd ever imagine. The lawsuit against my Dad was going very well for him ... the evidence was presented that my Dad had wrecked this guy's life, even though it was a little confusing how my Dad, stopped at a red light, had run into the motorcycle that struck the car in the back end. But the "witnesses" asserted that it was all my Dad's fault, so it just had to be so ... even though the police report didn't come to that conclusion. Anyway, we'd gathered up all the prior WC and UI insurance claims, settlements that other insurance companies had paid out to the guy, found another "victim" of his civil lawsuits ... and presented that to the court. If the fellow had had only 10% of all the permanent injuries that he'd been paid claims on in his life, he'd have long been unable to walk or even work painting toy wooden houses on his kitchen table, let alone scaling scaffolding 20'-30' in the air and dragging up the painting tools and equipment to work out in the hot sun. The judge caught on to the situation fairly quickly and suggested that our attorney close his case so that the judge could rule; summary judgement for the defendant. And we were urged to sue the "painter" for the false claims as well as his attorney who filed the frivolous case; we didn't because there was no assets to go after for either.
If anything, your assertion that it's "BS" that folk will put themselves at serious personal risk, if not legal risk, to try collecting on insurance fraud claims is ... well, just that: BS
[quote]If anything, your assertion that it's "BS" that folk will put themselves at serious personal risk, if not legal risk, to try collecting on insurance fraud claims is ... well, just that: BS[quote]
I don't have the facts in front of me, and I think it safe to say neither do you, regarding people that stage accidents for insurance purposes, but I am sure you would agree that most people who insure are honest people, and would never even think about insurance fraud.
So the percentage of good insurers too bad ones creates a huge gap.
There will always be a segment of society that goes against the grain, and that is a fact of life.
That fact should not even be considered when negotiating an agreed value when writing a policy.
Most insured are hard working, good honest people, and the problem is, insurers always blame the high cost of insurance and loss on the lower segment of insured, those that tend to defraud, and recoup those losses by gouging the honest people.
The money lost by insurance companies due to fraud isn't even on the scope, compared to what they make in profit from law abiding people.
As I stated in the thread above, the argument against agreed value won't hold water.
Insurance companies on the whole just want to keep making the big bucks, plain and simple, which is why the majority of them don't offer it.
Bob.
When our vehicle was totaled our insurance company paid us what we would have to pay retail for an equal vehicle with the same mileage, plus they gave us an extra $800.00 for the new tires we just purchased 3 days earlier. All we had to do was show the receipt for the tires.
This is key. Anything you're looking at which would increase the NADA value is going to require some documentation. I work in the industry, and the VAST majority of cases that I see where there is a dispute about the value are ones where the owner is unable to provide documentation about the "extras".
Insofar as your liability for the accident goes, that will vary from state to state. There are some jurisdictions where your check for your car will be reduced by the percentage that the insurance company determines you were at fault for the accident, and some that won't. It just depends on the state you're in.
I got $8500 for a 2004 Nissan Sentra with 78,000 miles on the clock.
I thought they used a Blue Book value, current Blue book value for a 2004 Nissan Sentra, with Auto and Air is $6,600 if sold via private sale. I wasn't aware you could bargain with the insurance companies, I thought you had to take what they offered, based on your cars options.
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