Insurance shortfall or specified additions?

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neoprema

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Anyone in the industry (or that has asked this before) know the difference between credit-shortfall or specified items when it comes to insuring your a financed car?

For example:
BMW X4 is R 1140 000 without extras.

Your insurer's "market value" will be R 1 140 000

Now you add extras from BMW, and we all know how that goes...
R 300 000 of extras brings the price to R 1 440 000

When you insure the car if it gets totalled tomorrow, they'll lookup the car's value which is R 1 140 000

So how do you make sure you get the R 300 000 in extras back in your payout?

Do you :
A. Specify Items (i did this on my Volvo but it felt weird like the insurer didn't quite understand what I wanted to do)
B. Take credit-shortfall and just insure market value.

So that if the car's written off, the difference in market value vs actual financed value will be plugged by the credit shortfall?
 
Harmonic said:
I personally wouldn't spend R300k for the flickers package

Most BMW drivers don't and it seems to work out ok for them
Click to expand...
I put R185k on the Volvo, R300ok a BMW is par for the course. You do get some awesome stuff for it though.
 
Credit shortfall is to cover the difference between market value and the amount you still owe on the car (to cover the 30% depreciation as you start it for the first time).

Specify all the extras and their value on the policy. If you're under insured they'll only pay out a portion of your claim.
satib.co.za

Under Insured - Your Playing with Fire

Under insurance is where your sum insured (maximum amount that can be claimed in the event of a loss) is less than the replacement/ reinstatement cost of the property or of specified items.
satib.co.za satib.co.za

Ie if you insure 75% of the value of the car, if it's written off they'll pay you 75% of the insured value.
 
Harmonic said:
I personally wouldn't spend R300k for the flickers package

Most BMW drivers don't and it seems to work out ok for them
Click to expand...
You're wrong though. On a modern BMW the lane assist will fight you if you try to change lanes without indicating!
 
1) Insure through a decent insurer
2) Use and work through a decent broker

3) Insure for current retail value
4) Add extras as per invoice which are not standard for that model
5) Insure for the value plus the extras

6) Get a settlement letter and insure the difference between 5) and 6) under credit shortfall either on the insurance policy or through your financer.
7) Get a settlement letter every 6 or so months and reduce 6) to the correct amount
8) Ask the insurer / broker to adjust the current retail value every 6 or so months.

This is the way - I have spoken.
 
Sinbad said:
You're wrong though. On a modern BMW the lane assist will fight you if you try to change lanes without indicating!
Click to expand...
They should call this the "Cape Town Mandatory Feature"...
 
Hemi300c said:
1) Insure through a decent insurer
2) Use and work through a decent broker

3) Insure for current retail value
4) Add extras as per invoice which are not standard for that model
5) Insure for the value plus the extras

6) Get a settlement letter and insure the difference between 5) and 6) under credit shortfall either on the insurance policy or through your financer.
7) Get a settlement letter every 6 or so months and reduce 6) to the correct amount
8) Ask the insurer / broker to adjust the current retail value every 6 or so months.

This is the way - I have spoken.
Click to expand...
hahah cool thanks :)

I'm already doing 1-5 not 6-8.

I'm happy with my current insurer but I'm tired of the app telling me how badly i drive lol. I mean honestly to make that thing score a perfect trip I would have to stick at 60kph, roll to a slow stop at a traffic light and pull off with the handbrake on to stop the acceleration de-score. The only saving grace is they don't track the breaking and acceleration when you're tailing some idiot doing 50 trying to nudge them on...
 
You typically have to specify the ”extras” but most insurers only allow you to add extras up to 25% of the base value. But when it comes to oem “extras” that are factory fitted those who be included in the base value, that literally is the retail/replacement value.
 
neoprema said:
hahah cool thanks :)

I'm already doing 1-5 not 6-8.

I'm happy with my current insurer but I'm tired of the app telling me how badly i drive lol. I mean honestly to make that thing score a perfect trip I would have to stick at 60kph, roll to a slow stop at a traffic light and pull off with the handbrake on to stop the acceleration de-score. The only saving grace is they don't track the breaking and acceleration when you're tailing some idiot doing 50 trying to nudge them on...
Click to expand...
I cannot imagine having insurance that monitors your driving via a tracker or an app. I don't need anybody watching over me and giving me the finger when it comes to claiming time. They can get lost.

With your insurer having all that driving data available to them you can bet your arse they gonna use it against you.
 
W@P said:
I cannot imagine having insurance that monitors your driving via a tracker or an app. I don't need anybody watching over me and giving me the finger when it comes to claiming time. They can get lost.

With your insurer having all that driving data available to them you can bet your arse they gonna use it against you.
Click to expand...
Well they say in the contract - which I assume has legal bearing - that the drive data cannot be used as input into the claims process.
 
W@P said:
I cannot imagine having insurance that monitors your driving via a tracker or an app. I don't need anybody watching over me and giving me the finger when it comes to claiming time. They can get lost.

With your insurer having all that driving data available to them you can bet your arse they gonna use it against you.
Click to expand...

You're thinking about it the wrong way around. They just use that info to reward good drivers so that the good drivers stay and the bad ones go get insured somewhere else. It's a carrot not a stick.
 
neoprema said:
Anyone in the industry (or that has asked this before) know the difference between credit-shortfall or specified items when it comes to insuring your a financed car?

For example:
BMW X4 is R 1140 000 without extras.

Your insurer's "market value" will be R 1 140 000

Now you add extras from BMW, and we all know how that goes...
R 300 000 of extras brings the price to R 1 440 000

When you insure the car if it gets totalled tomorrow, they'll lookup the car's value which is R 1 140 000

So how do you make sure you get the R 300 000 in extras back in your payout?

Do you :
A. Specify Items (i did this on my Volvo but it felt weird like the insurer didn't quite understand what I wanted to do)
B. Take credit-shortfall and just insure market value.

So that if the car's written off, the difference in market value vs actual financed value will be plugged by the credit shortfall?
Click to expand...
It shouldn't work like that...the price of the car is the price including all the extras and that's what should get paid out.

Shortfall is completely different thing where you've basically had too small a deposit and therefore the moment you drive it off the floor the outstanding loan amount is for more than the car is worth in a total loss situation.

The car's value is R1,440,000 and not R1,140,000.

You should only need a shortfall if you are putting down no or a very small deposit.
 
The big print giveth.
The small print taketh away.
Get a trusted broker or study the contract in great detail.
Negotiate and stick to your guns.
Even the insurance companies are feeling the pinch.
 
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