Insurance Depreciation

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Flowerhat

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I took out insurance on my vehicle 1 year ago.

I recently had the vehicle stolen and now they want to pay out 60% of what the vehicle was insured for.

My premium has stayed the same since last year, but I now have 40% less of my expected payout.

Is this allowed?

Currently with Outsurance
 
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McT said:
Less 40% sounds a bit steep. Have you checked the value of the vehicle independently?
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My book value is indeed 40% less, but I can't buy a new car at a dealership, they dont sell at this prices.. When I insured, they confirmed my book was at the higher price :<
 
Was it a new out the box car or pre-owned?

What do you mean by "When I insured, they confirmed my book was at the higher price"?
 
It was a pre owned car

When I insured, they said "we are insuring you at retail, the book value is R60,000". Somehow the book value dropped to R38 000 and I have no way of buying a new car.

My premium is almost R700 pm, i can honestly have saved up for 3-4 years and never use insurance.
 
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depending on you and the person you signed with. Part of your finance contract could be going towards an insurance that covers shortfalls, and assist with buying a car to a close value as you originally paid.
 
Even insuring at replacement value, insurance normally never pays more than the value specified in a certain guidebook ( something mcgregor if I recall ). If the insurance is short to your debt, the onus is on you to cover that with shortfall insurance, either independantly or through your finance institution as said bey Venomous.

Vehicle insurance is a tricky slope. I had new cars for the last 10 years but with a recent hijacking, did'nt want or could stomach a new car for what I lost ( nearly double the price ) so I bought a secondhand same year/mileage. Insurance value is a lot less and I've decided at a certain point I will can the comprehensive and switch to 3rd party,fire and theft to save money and rather put a bit extra away to save for a rainy repair day. Be careful of shortfall insurance too because if the insured value payout is higher than your remaining finance, the insurance will not pay out as there is no need and you may be paying it for nothing.
 
Kosmik said:
Even insuring at replacement value, insurance normally never pays more than the value specified in a certain guidebook ( something mcgregor if I recall ). If the insurance is short to your debt, the onus is on you to cover that with shortfall insurance, either independantly or through your finance institution as said bey Venomous.

Vehicle insurance is a tricky slope. I had new cars for the last 10 years but with a recent hijacking, did'nt want or could stomach a new car for what I lost ( nearly double the price ) so I bought a secondhand same year/mileage. Insurance value is a lot less and I've decided at a certain point I will can the comprehensive and switch to 3rd party,fire and theft to save money and rather put a bit extra away to save for a rainy repair day. Be careful of shortfall insurance too because if the insured value payout is higher than your remaining finance, the insurance will not pay out as there is no need and you may be paying it for nothing.
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i would rather pay the extra R100 a month for a potential nothing, than sit with a R40k gap
 
This sounds wrong and I need to know a thing or two.
Pm me the details if you want me to try advise.
Basically the whole process whom what where and basic discussions with dates and renewal dates etc.
 
ijacobs3 said:
i would rather pay the extra R100 a month for a potential nothing, than sit with a R40k gap
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If you are talking about the self insurance route, it depends how disciplined you are with saving money aside to cover the repair costs and remember, if insurance writes off , you have no ownership of the car, it's quite often better to self-repair.
 
Kosmik said:
If you are talking about the self insurance route, it depends how disciplined you are with saving money aside to cover the repair costs and remember, if insurance writes off , you have no ownership of the car, it's quite often better to self-repair.
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referring to top up cover
 
Something sounds dodge here. If you're insured at retail value then they should be paying you more than the book value as the retail value is usually higher than the book value. I used to be with First4Women and they tried to screw me over when my car got stolen. The reps told me my excess was twice more than it actually was and that they had sent me documentation to this effect. I had no such documentation and told them this, but they were adamant, so I would have basically ended in the same boat as you; unable to buy a decent car with the payout.

Fortunately for me I had registered on their website and could see that what they were saying did not match what was on the website and the hard-copy of my policy documents. I called the head office and asked them what my excess was. They confirmed what was on the website and my hard-copy, so I asked why then the PE branch was giving me a different figure and they immediately changed the story to "oh look my apologies. The branch is indeed correct. There's a mistake on the system"

To cut a long story short, I threatened to go to the papers about their underhanded dealings and lo and behold they payed me out what I was owed and even waived the excess.

Retail Value

This is the value that the car 'retails' for if you were to buy it from say a dealer on a showroom floor. This retail value includes the markup that the dealer earns on the sale. In other words, the retail price is what the consumer pays for the motor vehicle.

The retail price is the closest value to replacement cost, ie. the nearest amount needed to replace your car with a similar vehicle in the even of theft or write-off.

Therefore if you experience a total loss such as theft or a write-off you will have the best payout if you insured your car at the retail value.

Trade/ Book Value

The trade or book value of a motor vehicle represents the average price that a motor dealer will pay you for your vehicle. This is hence the price that you receive from the dealer. The dealer will then take the car and add a markup and on-sell the vehicle to the public at a retail price higher than your trade value received.
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Since you're insured at retail, your payout should be enough to buy a similar car. I can't imagine that your excess would be more than 7%? (don't have my policy docs with me so can't confirm)

Flowerhat said:
It was a pre owned car

When I insured, they said "we are insuring you at retail, the book value is R60,000". Somehow the book value dropped to R38 000 and I have no way of buying a new car.

My premium is almost R700 pm, i can honestly have saved up for 3-4 years and never use insurance.
Click to expand...
 
SaoirseB said:
Something sounds dodge here. If you're insured at retail value then they should be paying you more than the book value as the retail value is usually higher than the book value. I used to be with First4Women and they tried to screw me over when my car got stolen. The reps told me my excess was twice more than it actually was and that they had sent me documentation to this effect. I had no such documentation and told them this, but they were adamant, so I would have basically ended in the same boat as you; unable to buy a decent car with the payout.

Fortunately for me I had registered on their website and could see that what they were saying did not match what was on the website and the hard-copy of my policy documents. I called the head office and asked them what my excess was. They confirmed what was on the website and my hard-copy, so I asked why then the PE branch was giving me a different figure and they immediately changed the story to "oh look my apologies. The branch is indeed correct. There's a mistake on the system"

To cut a long story short, I threatened to go to the papers about their underhanded dealings and lo and behold they payed me out what I was owed and even waived the excess.



Since you're insured at retail, your payout should be enough to buy a similar car. I can't imagine that your excess would be more than 7%? (don't have my policy docs with me so can't confirm)
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Exactly that, and they only offer book value - excess.

Outsurance is a bunch of cocksuckers >:( really not impress

Glad I wasn't a long term customer
 
Flowerhat said:
It was a pre owned car

When I insured, they said "we are insuring you at retail, the book value is R60,000". Somehow the book value dropped to R38 000 and I have no way of buying a new car.

My premium is almost R700 pm, i can honestly have saved up for 3-4 years and never use insurance.
Click to expand...


These values look very similar to amounts i saw recently while shopping for a secondhand Toyota Yaris. although normally a good valued car, there is a MASSIVE difference from about 8 to 9 years old. eg a 2007 model, although retailing at most dealers for 60K plus, was only insured for a retail value of 38,000... BEEG difference.

I checked this with a a few insurance companies, and in the end decided against buying - the gap is too high, and shortfall cover would have been needed.

learning from this, i think its a good idea to call your insurance every year and compare retail value vs what you owe. If a big drop occurred, add shortfall cover.
 
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