So out of curiosity I thought I would go down the pathway of researching the market value of our car by going through what is undoubtably the largest online site for the sale of motorcars in Australia with advertisers from both car-yards and private sellers. Now initially in my head and going by the maximum agreed value set by the insurance companies our is valued at about $10k. This is a fairly standard white family vehicle - Toytota Kluger. Anyway I wondered that if this car was written-off could we replace it for $10k and I was surprised to find that any equivalent Kluger - same colour, model, years and kilometres on the clock would cost us around $22k. I got in touch with a number of the major insurance companies to discuss how their actuarists establish this agreed value based on what ever algorithms they use and how our car could only be insured for half of this current market should be write the vehicle off. Each time I was informed that this is the price that is set by their assessors and agreed value is just that, you agree to their value.

So, trying to insure our vehicle at a price that would replace "like for like" seems an implausible option. You would think that such a mainstream vehicle would reflect how valuations occur with most vehicles (short of going to a specialist insurance agent - Shannons or the like (but a Kluger is anything but a Shannons type car)).

Out of interest I though I would throw this one out there to see if it is just the case with others vehicle models and makes, as is seems the age old "market" value principle does not apply anymore.

Then there's also that interesting "undervalued" concept, where the insurance companies reduce the payout by a percentage of the difference between what you've insured it for and the market value. So I wonder if this is another sneaky way of ripping you off

So, trying to insure our vehicle at a price that would replace "like for like" seems an implausible option.

Just insure it for an agreed value, your then covered

Semi related to your comment - if you go through the rac website for a comprehensive insurance quote, you can enter your details via rego # and when you switch from market to agreed value the slider defaults to the market value they have assigned, so you can get an idea of what the insurance company thinks your vehicle is worth.

Exactly that, "agreed value" doesn't mean you actually agree to it. They have an agreed value that is bound by limits, which consistently fall well below and in most cases about half of what can be found in the real market.

I copped the same bull**** with my Amarok. I paid $22500 new, they're selling for $20000 in this condition now (amazing, I know) the insurance company is offering 12,000.
I self insure now

Doesn't 'agreed value' literally mean that this is the value that they are insuring for, as opposed to market value?

I had a friend years ago that had his car stolen and went through a drama with the insurance company about the market value. In those days things were not as easy to research, but he ended up getting reports from his mechanic showing that the car was in good condition and kept well.. They ended up paying a proper market value, but they were not keen on it. It took him a while.

If its agreed value though, you will get only that minus the excesses and the like.

I keep seeing ads on SBS for some insurance company that claims as long as you buy your car new and insure with them from new, they'll replace it with a new car if it gets wrecked.
I don't care, because I don't buy new and carry 3rd party damage.
Mind you, I'll be annoyed if some halfwit hits me and their insurer won't give me enough money to buy a similar vehicle.

And check your policy every year. My 'agreed value' was never altered by me but has gone from $14K to $7K without the premiums dropping.

When your 22K vehicle blows a gearbox and you're quoted 5K for the repair the insurance company doesn't want you to be tempted to arrange a prang .

Here is my review of Allianz Im not sure who your with But there keen to take your money and not pay out. Just want a fair go. I was ready to punch the insurance Asser (a unsupervised trainee) in the head scull drag the stupid **** down my drive way and leave him at the gate while i set his car alight.
Make no misunderstanding. Insurance companies are bottom feeding dogs.

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shi thouse said..
Exactly that, "agreed value" doesn't mean you actually agree to it. They have an agreed value that is bound by limits, which consistently fall well below and in most cases about half of what can be found in the real market.

You choose to agree with it when you take up the policy.

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Mr Milk said..
I keep seeing ads on SBS for some insurance company that claims as long as you buy your car new and insure with them from new, they'll replace it with a new car if it gets wrecked.
I don't care, because I don't buy new and carry 3rd party damage.
Mind you, I'll be annoyed if some halfwit hits me and their insurer won't give me enough money to buy a similar vehicle.

And you'll pay a premium to match.

My latest insurance premium was $295 per annum. Third party property only, of course, but kind of amusing that it's probably more than I'd be able to sell the car for.

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busterwa said..
Here is my review of Allianz Im not sure who your with But there keen to take your money and not pay out. Just want a fair go. I was ready to punch the insurance Asser (a unsupervised trainee) in the head scull drag the stupid **** down my drive way and leave him at the gate while i set his car alight.
Make no misunderstanding. Insurance companies are bottom feeding dogs.

Hey man, that sucks. I hope you get something back.

Sadly its no use attacking one person, as the company will set the policy and they all just follow it whether they want to or not.

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Harrow said..

Mr Milk said..
I keep seeing ads on SBS for some insurance company that claims as long as you buy your car new and insure with them from new, they'll replace it with a new car if it gets wrecked.
I don't care, because I don't buy new and carry 3rd party damage.
Mind you, I'll be annoyed if some halfwit hits me and their insurer won't give me enough money to buy a similar vehicle.

And you'll pay a premium to match.

My latest insurance premium was $295 per annum. Third party property only, of course, but kind of amusing that it's probably more than I'd be able to sell the car for.

The sad thing is that comprehensive on your car would still cost a lot, as even though its older the premium has to cover the same work to repair as would be involved in a new car, and in some cases it can cost more. At least the 3rd party component should be the same.

I am all for 3rd party insurance only, but when was in Sydney there were so many idiots on the road during my commute that I almost expected to be run into and have people try and get out of it, so comprehensive is worth it sometimes. Now I have cheap dashcams fitted to each car just in case as I am sure the idiots that do stupid things on the road will also be the same idiots that lie about it when things go wrong.

Insurance is an absolute joke. I had been with one insurer for 23 years, never made a claim. Just got my renewal on 2016 Navara, premium went up another $120 from last year, value dropped 2k. Having just turned an age where i can claim to be a senior,, i rang around. As i plan on doing some travelling i had recently added some 10k worth of extras, which i hadnt told my old company about. New seniors insurer, with the extras, insured for 5k more than previous, for $300 less per annum. Phoned old insurer, added the extras and was told it would be another $398 on top of the $120 it went up. Needless to say they are now my ex insurance company. Two cars and home and contents moved.

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dratts said..
Insurance is an absolute joke. I had been with one insurer for 23 years, never made a claim. Just got my renewal on 2016 Navara, premium went up another $120 from last year, value dropped 2k. Having just turned an age where i can claim to be a senior,, i rang around. As i plan on doing some travelling i had recently added some 10k worth of extras, which i hadnt told my old company about. New seniors insurer, with the extras, insured for 5k more than previous, for $300 less per annum. Phoned old insurer, added the extras and was told it would be another $398 on top of the $120 it went up. Needless to say they are now my ex insurance company. Two cars and home and contents moved.

I think this is where 'seniors insurers' have their niche. They are cherry picking a market where claims are less, so the premiums can then be less.

It makes me wonder though, how niche can you be before you are discriminating against other people? With insurance I guess its already like this when they charge higher premiums for higher risk, but with specialty insurers they just have that market only.

I'm a senior and way ahead. Never paid up for comprehensive insurance in 50 years on the road. Of course I have never accumulated a demerit point. Your current accumulated demerit points is highly correlated with the probability of you having an accident in the next 12 months. Those sitting on a high number of demerit points are 16 times more likely to have an accident than the average driver! The insurance companies know all about this but of course they don't pass on the full value of the individual risk. The probability of saving money by driving carefully and not insuring is pretty good.

www.monash.edu/muarc/archive/our-publications/reports/muarc116

"Amongst the 500 highest scoring drivers, the "category of offence" and "demerit point level of offence" models were equally efficient in identifying the crash-involved drivers. For both these models, the proportion of drivers amongst the 500 highest scoring drivers who were subsequently involved in 1993-1994 crashes was 12.4%, ie. considerably greater than the 7.3% crash-involvement rate for the top 500 drivers identified by the base model which did not use prior offence data. The corresponding crash-involvement rate for all drivers in the database was 0.76%."

Agreed Value... ?


Well, if there is one thing we can all agree the value of, then it is the value of Carantoc's contributions to these very forums.....

I wonder what premium Laurie pays for his insurance against the loss to Seabreeze.com.au should Carantoc's quick wit and endearing charisma depart.

One can only shudder at what a heinous outcome that would be, but at least we can all rest assured the likelihood is incredibly low.

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Carantoc said..
Agreed Value... ?
Well, if there is one thing we can all agree the value of, then it is the value of Carantoc's contributions to these very forums.....

I wonder what premium Laurie pays for his insurance against the loss to Seabreeze.com.au....

He had to use a broker as no single insurer would cover that risk and they had to spread it across multiple insurance groups. I think they shared it across HIH and FAI.

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.... should Carantoc's quick wit and endearing charisma depart.

Let us know when it arrives and we will keep a look out for it?

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busterwa said..
Here is my review of Allianz Im not sure who your with But there keen to take your money and not pay out. Just want a fair go. I was ready to punch the insurance Asser (a unsupervised trainee) in the head scull drag the stupid **** down my drive way and leave him at the gate while i set his car alight.
Make no misunderstanding. Insurance companies are bottom feeding dogs.

Sister had an issue with same company, car was written off in an accident however when she made a claim said company refused to acknowledge her policy existed.

After a protracted battle she gave up, then a several months later insurance company sent a renewal notice for said policy. They were told to go sick it up their arse.

Australia has 1% of worlds premiums and 3% of worlds claims. Fires, floods and hail are the problems. Just getting insurance for some businesses is impossible.

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goofy said..

busterwa said..
Here is my review of Allianz Im not sure who your with But there keen to take your money and not pay out. Just want a fair go. I was ready to punch the insurance Asser (a unsupervised trainee) in the head scull drag the stupid **** down my drive way and leave him at the gate while i set his car alight.
Make no misunderstanding. Insurance companies are bottom feeding dogs.

Sister had an issue with same company, car was written off in an accident however when she made a claim said company refused to acknowledge her policy existed.

After a protracted battle she gave up, then a several months later insurance company sent a renewal notice for said policy. They were told to go sick it up their arse.

Goofy continue to disrupt operations and leave bad feedback about your insurance company .Make your experience known. as consumers, we can make a difference.

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Main said..
Australia has 1% of worlds premiums and 3% of worlds claims. Fires, floods and hail are the problems. Just getting insurance for some businesses is impossible.

Is that by value or by number of interactions with the insurers? If premiums are too low to cover the risks, that can be easily corrected, but if customers are making lots of trivial claims it's a different problem.

insurance is a scam

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theDoctor said..
insurance is a scam

So is banking

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japie said..

theDoctor said..
insurance is a scam

So is banking

Most insurance companies are owned by banks

Alternative....not insure.

Any organised sporting event that I do or my kids do.....majority of the cost is.....wait for it........insurance.

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shi thouse said..
Alternative....not insure.

Any organised sporting event that I do or my kids do.....majority of the cost is.....wait for it........insurance.

Blame the legal system. If more cases are won over "negligence" then insurance is the only answer. It would make sense for lawyers to be insurance brokers.

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busterwa said..
Here is my review of Allianz Im not sure who your with But there keen to take your money and not pay out. Just want a fair go. I was ready to punch the insurance Asser (a unsupervised trainee) in the head scull drag the stupid **** down my drive way and leave him at the gate while i set his car alight.
Make no misunderstanding. Insurance companies are bottom feeding dogs.

Not my favourite company either Wife's can got totaled by a drunk, speeding red P plater.... no insurance cos he's drunk. Insurance payout is $1K less than market cos we have to pay OUR excess resulting in a payment that covers a replacement car at 5 yrs older than the smashed one with 2X the no of Kms. They did state they would try and recover the 1K down the track from the other driver. . We borrowed more $ and replaced with new. Very pissed off

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kato said..

busterwa said..
Here is my review of Allianz Im not sure who your with But there keen to take your money and not pay out. Just want a fair go. I was ready to punch the insurance Asser (a unsupervised trainee) in the head scull drag the stupid **** down my drive way and leave him at the gate while i set his car alight.
Make no misunderstanding. Insurance companies are bottom feeding dogs.

Not my favourite company either Wife's can got totaled by a drunk, speeding red P plater.... no insurance cos he's drunk. Insurance payout is $1K less than market cos we have to pay OUR excess resulting in a payment that covers a replacement car at 5 yrs older than the smashed one with 2X the no of Kms. They did state they would try and recover the 1K down the track from the other driver. . We borrowed more $ and replaced with new. Very pissed off

Hi all, lots of misinformation being spread here. I am an insurance broker and happy to answer questions.
Re the above Kato - market value is just that, the current market value to buy your car. There is no way a settlement should have been accepted that is not enough to purchase a like for like vehicle (less the $1000 xs). Not one that is 5 years older and not one with double the kms.

The $1000 xs was your choice and you chose to self insure that component of your risk. Whilst not your fault the insurer can attempt recovery of the xs, however often in such cases you can't get money out of someone who has none. Why is the fact that the other driver has no $ to give you their fault?