Insurance market value

[LBD]

I had seen a thread that went on about a customized bike that was totaled in a no fault accident and yes I beleive the bike owner was bordering on un reasonable....but what if....

You have a bike written off after it was collided with by a car that went straight through a stop sign....The bike is bog standard and was in good condition and low km. The insurance company says the market value is $6800....where do they get that figure from? Especially when there are 17 others similar on TM with the roughest, nearly tripple the milage version, asking $9000 and others up tp to $17000...

There is something shady going on here and I stand to be out of pocket maybe $6000 due to anothers careless driving.

Any thoughts from those who know facts in this scenario?

[Gremlin]

First of all, good luck finding agreed value for anything except classics pretty much, all general insurance is market value (I've tried before and you're pretty much pushing the proverbial uphill).

I believe market value to insurers is finding the lowest price on TradeMe and running with that (or RRP if the bike is new enough). Not helped by the depressed economy. That was how they seemed to determine price when they were considering writing off a bike of mine. You're also welcome to ask and question the company about how they determined that value (and they should have more than one price). More often that not, some companies will offer a lower value to begin with, until you raise hell then it becomes more reasonable. Also make sure they are valuing the correct model (specifically).

I fell into this trap, where they were using a GS to value a GS Adventure. Then worked off the RRP for a GS Adventure, but the base model isn't available in NZ, only the fully equipped model, which is some $6000 more expensive. Then they tried to use values of older 06-07 on TradeMe, which have different engine configurations, ESA/TPM/ABS etc... Failing all of that, challenge them to purchase one for the dollars they are offering.

It's a bit of a game really, imo, you just have to play it better. :laugh:

As an aside, remember to list items you want covered by insurance, with them. That way there is no confusion about missing pieces etc.

[slofox]

Always bear in mind the fact that insurance companies exist primarily to make money. They do NOT exist for the benefit of their customers.

Ergo, they will rip you off to the best of their ability at any point in time. They are quite happy to take a premium that covers much more than they are prepared to pay out on.

I speak with the voice of experience on this.

[baffa]

The Redbook value is what most values are based upon, Insurance companies dont automatically know the value of your vehicle, so they rely on outside sources, redbook being the main one.
Rather than asking us, you are normally best speaking to the insurance company about where they got their value from.
If you feel it is unfair, then get a pre-accident valuation from a bike dealer and take it to your insurer, they should take it into account.

The sum insured/payout of a vehicle should be it's retail price. Eg the cost to buy from a dealer, as opposed to the cheaper tradein price or cheap deals on trademe, so if your Insurer is being stubborn, follow the complaint process.
Speak to the claims manager who manages the person taking care of your claim, then if need be file a complaint and inform them you wish to take your case to the Insurance and Savings Ombudsman.

[Jantar]

... Failing all of that, challenge them to purchase one for the dollars they are offering......

I know a chap who did just that when he crashed his glider. The insurance company took up his suggestion and bought a glider of the same make and model for him. Both parties were happy.

[Maha]

Always bear in mind the fact that insurance companies exist primarily to make money. They do NOT exist for the benefit of their customers.

Ergo, they will rip you off to the best of their ability at any point in time. They are quite happy to take a premium that covers much more than they are prepared to pay out on.

I speak with the voice of experience on this.

Would it be wise to NOT pay your premium each year (or however you pay it) on the original agreed amount. Ask for their ''market value'' on your bike, then adjust the policy to suit and pay on that?
Because at the end of the day, you seem to be paying a premium on a fictious amount.

[Gremlin]

Would it be wise to NOT pay your premium each year (or however you pay it) on the original agreed amount. Ask for their ''market value'' on your bike, then adjust the policy to suit and pay on that?
Because at the end of the day, you seem to be paying a premium on a fictious amount.
Yes, however, you effectively have to over-insure. It's doubtful they would ever pay the full amount of the valuation, they would certainly never over-pay.

My policy does adjust every year... I would prefer to pay more and have agreed value, but it doesn't work like that...

[slofox]

Yes, however, you effectively have to over-insure. It's doubtful they would ever pay the full amount of the valuation, they would certainly never over-pay.

My policy does adjust every year... I would prefer to pay more and have agreed value, but it doesn't work like that...

I just got a renewal notice today for the wagon. They actually asked me to check the agreed value. But then, this is from a broker, not an underwriter.

You make a good point though Gremlin ("It's doubtful they would ever pay the full amount of the valuation"). Means that they effectively taking more money from you than they need.

I once tried asking an insurance co. to quote me how much they would agree to pay out. They flat out refused. Funny that...:confused:

[baffa]

Would it be wise to NOT pay your premium each year (or however you pay it) on the original agreed amount. Ask for their ''market value'' on your bike, then adjust the policy to suit and pay on that?
Because at the end of the day, you seem to be paying a premium on a fictious amount.

Yes, that's a fantastic idea. I'm also going to stop paying my taxes until they finish the roadworks down my road.

[LBD]

I had a good conversation with the insurer this morning....afternoon your time.

It seems that the value of the bike is not taken from a book or reviewing market values....It is calculated from the purchase price way back when, then annual depreciation applied. Aparently I am supposed to review this when the policy is renewed annually to ensure I am happy with the value...so that is my bad.

However as this accident is the fault of another, what will happen is, IF they write it off, a valuer or several estimate the value of the bike before the accident and we hit up the "at fault party's" insurer for the fair market value. So at this stage all may work out fair....we will wait and see.

[GrayWolf]

In the UK they use Glass's guide, similar to the REDBOOK I'd guess.... however when you read Glass's its the dealer 'guide' for value (purchasing the bloody thing for resale, basically)...... so it has a lower than 'market sale' value and what they call good condition? Would be like those bloody Toyota specialy prepared s/h cars, and drop down rapidly in value from there.... \ its the old adage.... when a dealer sells you a bike with 40k on it? It's a 100occ mate, 10 yrs old and just run in... when you go to PX it? well average milage is 7k, so well you are on the high side, its got a few tiny scratches, etc, etc......
Funny thing is, the GUIDE is used as the finite valuation.....

[MIXONE]

Insurance companies and politicians have hopefully got there very own hell to be banished to.
Hope you suvived the crash ok?Which bike is munted?

[DR650gary]

Get a couple of pre accident valuations from dealers or motor vehicle valuers and they will all be averaged out. If the insurance company is out of kilter with their valuation, get three and you will be able to knock their's out without too much effort. Just remember, there is advertised price and sale price and you may be surprised at the difference. Look at all the bikes on Trademe that do not sell. That may be different overseas but also third party liability only covers indemnity (cost less depreciation) not replacement so it is best to lodge the claim through your insurer and let them fight your battle.

Cheers

[AllanB]

Trademe is useless for placing a value on your bike - there will be someone who is 'selling the bike dear' and has overinflated the bike so it does not move and someone who is almost giving theirs away as they need quick cash to skip the country.

[LBD]

Trademe is useless for placing a value on your bike - there will be someone who is 'selling the bike dear' and has overinflated the bike so it does not move and someone who is almost giving theirs away as they need quick cash to skip the country.

That is true, but if you average all the similar condition bikes (especially if there are a few), then deduct 10% off the average.... because you are a nice guy and do not want to rip off the insurance company....then you should not be far from a fair market value.

[LBD]

Credit to my insurer...they came back with a fair valuation and have begun 10K worth of repairs...

[bsasuper]

In almost all vechicle claims where there is a write off, insurance companys are going to offer you the lowest amount, and in most cases it gets accepted.
Do a bit of homework yourself, simple stuff like seeing what dealers prices are,ring your insurance company posing as a new client to get a payout figure etc etc.You DO NOT have accept what they are offering you, most people would want a few thousand $$ more payout all for doing a bit more ground work and standing up to insurance companys.

[KoroJ]

Yes, however, you effectively have to over-insure. It's doubtful they would ever pay the full amount of the valuation, they would certainly never over-pay.

My policy does adjust every year... I would prefer to pay more and have agreed value, but it doesn't work like that...

I've have experienced a payout of $95K on a truck insured for $90K...The Insurer had a pre-accident valuation done and paid on it with no questions asked, no coersion required. It doesn't happen often, but it does happen.

It does pay to review/adjust the Sum Insured at renewal as, too high and your paying too much in premium (not that a $1K in value will affect the premium greatly), too low and who wants to encourage an arguement at claim time!



In almost all vechicle claims where there is a write off, insurance companys are going to offer you the lowest amount,.........

You obviously don't deal with very reputable insurance companies? (and by that, I don't mean high profile)

I would suggest that cheapest isn't always best and there is some merit in going through a broker rather than a call centre.

[pritch]

You obviously don't deal with very reputable insurance companies?

Reputable insurance companies? That concept might be influenced by geographical location.
F'rnstance, there may not be many "reputable insurance companies" in Canterbury these days?

Actually that phrase reminds me of another: "honest politician".

[baffa]

You mean there was reputable insurance companies in Christchurch to start with? :nya:

[caseye]

Worse, a Poli with a solid rep??? Na couldn't be.Only dealings with insurance co's of late they've both settled quickly and fairly, can't complain, and one of em was AMI, the other was Swann and what a bunch of GC's they were.Kept in touch and did it all right.Still with them now got three bikes there, pity they don't do cars, houses etc, they'd have all my stuff.

[LBD]

In almost all vechicle claims where there is a write off, insurance companys are going to offer you the lowest amount, and in most cases it gets accepted.
Do a bit of homework yourself, simple stuff like seeing what dealers prices are,ring your insurance company posing as a new client to get a payout figure etc etc.You DO NOT have accept what they are offering you, most people would want a few thousand $$ more payout all for doing a bit more ground work and standing up to insurance companys.

A big factor hinges on...
Your insurance company and you are at fault or...
Your insurance company and the other party is at fault..with a different insurer.
Not sure how an insurer would play it if the one company covered both partys...?

[Winston001]

Sorry to hear about this Paul - was it the 1098? And more importantly, were you on the bike and are you ok?

[Winston001]

Just a general comment on the subject of insurance. When you pay a premium that sum is based upon the history of tens of thousands of claims. Actuaries (who are maths geniuses) can calculate very accurate risk profiles from that information.

Most claims are for damage not total loss, which means that the core of the premium doesn't differ much. Increasing your cover $1000 may cost $12 extra - but underinsuring will cost you $1000 or more. This is fundamental to insurance but most of us don't know it.

I always overinsure (after a broker explained) because I'd rather pay a few cents extra premium than be underinsured and have the stress of arguing with a large company. And I say that having spent my professional life arguing on behalf of people.