Vehicle Values and Coverage Options

As much as consumers may not like it, the simple fact is that vehicles depreciate in value at a fast pace. Not many other products lose such a significant portion of their value the moments after leaving the store. This can be especially frustrating when consumers are trying to purchase insurance for their vehicle. Luckily there are several practices and programs that can make this process much more consumer friendly.

The first thing to consider when buying a vehicle is how much is it actually worth, not the asking price. Consumers can use resources such as Kelly Blue Book or an actual appraiser to determine an estimated value of the vehicle. This is usually representative of how much the consumer would be reimbursed, less the deductible, in the event of a total loss. vehicle appraisal munich

Once the consumers have found the price, it is time to decide if comprehensive and collision coverage is appropriate for the value of the vehicle. Consumers should weigh their options and compare the additional insurance expenses associated with comprehensive and collision coverage with the value in the vehicle requesting the coverage.

More often than not, consumers will pay far less for their insurance over the course of car ownership than they will for the car; however, there are times when it is just not financially practical to insure a vehicle with comprehensive and collision coverage.

In some cases, the annual premium for comprehensive and collision coverage may exceed the total value of the vehicle itself, less the deductible. For instance, it would not be wise for a consumer to pay an additional $1,000 in premium with a $1,000 deductible for a vehicle that has a total value of $2,000. At this rate, if the consumer were to be claim free for one year, the additional premium collected by the insurance carrier would exceed the maximum insurance loss.

One option for vehicle owners is a stated value policy. This is often the process for insuring many classic cars. Classic car insurers will agree to insure the vehicle for you state it is worth, regardless of actual value. The premium is based off of the price you give and in the event of a total loss is the amount you would receive, minus your deductible. Consumer should speak with their insurance agent regarding this coverage, since many carriers will pay out only the true value with a maximum of the stated amount.

Choosing the proper coverage on an insurance policy will ultimately be the decision of the named insured. The best protection for the consumer is education.

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