Agreed Value vs. Stated Value Auto Insurance
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Sadie’s husband bought her a brand spanking new Cadillac for Christmas! With a big red bow on it just like you see in the TV ads! On December 30, with just 759 miles on it, coming home from Publix she was T-boned at an intersection by a red light runner!
The Restomod is a relatively recent phenomenon in the collector-car world. As an alternative to the “survivor restoration” process, these new cars mix old and new technology to create the best of both worlds, matching classic styling with modern comfort, performance and reliability. From giant, retro-styled wheels to Singer’s hand-built Porsches, enthusiasts are able to have their cake and eat it too!
Through no fault of her own, Amanda’s 2017 Hyundai Elantra was involved in an accident. It needed $3,902 in repairs, which was paid for by the at-fault driver’s insurance company. As a result of the accident, and despite the fact that Amanda’s Elantra was professionally repaired, it suffered ‘Diminished Value’, or a sudden loss of value.
Tim M’s 2014 Kia Sorrento was stolen in December 2018, never to be seen again! His insurance company offered to compensate him $11,329 for his total loss. Tim felt this was less than fair market value so contacted us to help him. We advised him to inform his insurance company that he wished to invoke the ‘Appraisal Clause’ in his policy. We all have one in our policies!
By law, if a car owner wants his or her car to be legal to drive, then that car must have a car insurance policy in force, which is a law that also extends to modified cars. This is true even if the owner drives the car or not, whether the car has a registration plate or not, and whether it runs or not. However, insuring a modified car is not the same as insuring a non-modified car, and there are strict rules and regulations the modified car owner must follow. While many modified car owners purchase full tort insurance policies from specialized insurance agents experienced with modified car insurance policies, getting any policy for the car has some downfalls.
Even if you've never been involved in a car insurance scam, rest assured that you have felt their effects in the form of higher premiums. There is no national authority that keeps track of all types of auto insurance scams, but reports from various sources indicate the phenomena can cost insurance companies upwards of $6 billion per year and may account for up to 15 percent of all claims filed. Having to pay these claims results in higher premiums for policy holders, including you and me.
If you have submitted an insurance claim and feel the offer to replace your vehicle is inadequate, you’re probably right! Of all the Insurance offers we evaluate, there are only a few companies which make a reasonable offer and we can tell clients “you’re getting a decent offer.” It may be on the lower end of what the car is worth, but the cost of an appraisal isn't going to generate a sufficient return on investment.
An appraisal clause is a clause or paragraph found in most, but not all, insurance policies. It is designed to be a way of reaching a settlement when there is a dispute over the amount of a loss between you and your insurance company and can be invoked by either party. The appraisal clause can be utilized when there is a dispute over the value of your vehicle in a total loss claim. The appraisal clause is generally found in the "Damage to A Vehicle" section of your policy. Following are the basic steps to invoke the appraisal clause of most policies.
We’re all familiar with Depreciation, right? It’s the gradual loss of value over a given time. So what’s Diminished Value? Let’s look at this scenario. Imagine that you are stationary at a stop light or sign and suddenly a negligent driver rear-ends your vehicle. Your vehicle has just suffered Diminished Value (also known as inherent diminished value or diminution of value).
Let’s look at the two different types of auto insurance: Stated Value and Agreed Value. “Stated Value” is the insurance most of us have on our daily drivers which are depreciating