Agreed Value vs Market Value Car Insurance

Renewing your car insurance can be tricky. One key question that people often ask is whether they should go for agreed value or the market value for their car insurance policy.

It is helpful to understand the two terms and the differences between Agreed Value and Market Value:

Agreed Value:

Under an agreed value car insurance policy, you are agreeing the the value with your insurer when you take out your insurance policy. This agreed value won’t change during the duration of your policy, which is typically 12 mths. The agreed amount is often reviewed at your renewal date of your policy.

If you like certainty, then purchasing your car insurance with an agreed value can provide it. If your car is damaged beyond repair or stolen and not recovered, then your insurer should pay you the agreed amount.

Agreed value amounts may differ between insurers, so it is worth considering this when purchasing your car insurance.

Note: The agreed value amount that gets paid out by an insurer is typically less any outstanding premium payments, excesses or instalments that are owing.

Market Value:

Under a market value car insurance policy, the value of your car (and payout due) will be determined at the time of the claim. This means that your pay out from your insurer is decided at the time you make a claim. Again a payout may only occur if your car is written off, stolen and not recovered.

The market value of cars can change during the time period in which your are insured. Typically most cars will see their market value decline over the years and even during year in which you are insured.

The market value that an insurer will payout may or may not include such extra replacement costs such as transfer costs, dealer fees,  excesses and stamp duty etc.

Independent Data

So where can you turn to help you make a decision? A starting point maybe to accessing some independent third party data to enable you to work out the potential replacement costs for your vehicle. Then once you have a handle on the potential replacement cost, then you can select car insurance with agreed value or market value to meet your needs.

One source of third party data is Red Book, or alternatively, you could do some research on car classified sites such as Carsales or Drive.

 

Can you remember what you usually choose? How did you make your decision?

What Can Insurance Learn From Banking

So you do your banking online, maybe on your phone. It’s pretty good, right? I mean it’s there in your pocket, and the app lets you do what you need to straight away. Convenient, functional, good.

That’s what The Australia Customer Experience Index, 2016 says too, a survey of 8,982 Australian adult online customers said that their bank gave them basically a “good” online experience, and it’s a little better each year.

But what about your insurance? Do you manage that online? How engaged are you with your insurer online? Hang on, actually that’s a bit hard because most people only have one bank that they use, but between health insurance, home insurance, car insurance, life insurance and the rest, people have multiple insurers they’re interacting with. All with different apps, different ways for people to interact and different places for people to find all their relevant information. Sometimes, people can’t even tell you how many, or even who all their insurers are.

Perhaps that people use all these different insurance providers, is why Australians have rated their online experience with their insurer only as OK. In fact the research says that Australians actually think their online experience with their insurer is getting worse!

It’s complex. Most people only visit each insurer once a year, so to remember their password and log in details is hard. You have to search through your emails or your filing cabinet to remember which insurer you’re covered by, before even getting to trying to log in. This is no ground for a good customer experience – and we all know it.

Advisr exists to help this exact issue. We want your online interaction with insurance to be simple. A single password. One location where you know all your information is kept, and kept securely. A single glance to be perfectly up to date on who you’re with, how much you’re paying and when it’s due.

Even better, soon enough Advisr will also be able to let you know if you’re paying more for your car insurance than Sally down the street who has the exact same car as you.

Those features are coming, but in the mean time, right now, you can enjoy a new level of online insurance experience with Advisr.

Statistics Reference

Insights on Total & Permanent Disability Insurance

In this Advisr Experts Opinion, Greg Dobrin, of Sureserve Financial Services, discusses total and permanent disability insurance and a few general things to know when considering this type of insurance policy. Specifically, exploring the differences between TPD ‘any’ and TDP ‘own’. 

 

Total and Permanent Disability (TPD) Insurance provides cover in the event a person can no longer work.

TPD has two different definition types:

  • TPD ‘any’ where the insured can no longer perform any occupation.
  • TPD ‘own’ where the insured can no longer perform the occupation they are trained to do.

TPD ‘own’ will be more specific as a person may be trained to do one job, but could still perform another.  TPD ‘own’ is useful where a person has trained or been educated for a specific job, such as:

  • A doctor
  • A lawyer
  • An accountant
  • A mechanic
  • An engineer
  • A scientist

In the event of an accident, a person may no longer be able to do the job they were trained to do BUT they could do another job (eg a doctor could do lecturing, a lawyer could do administration work etc).

TPD ‘any’ is fine to have held inside superannuation, because if a person can no longer perform ‘any’ occupation they will be effectively retired. 

TPD ‘own’ is not suitable to be held inside superannuation as the insured could still work (in another field). As a result, it would not satisfy a condition of release from their superannuation. The money would remain inside the superannuation fund (and be of no use to the insured) until they meet a condition of release.

While it sounds simple, there is more than meets the eye. Given the complexity of these issues, it is important to seek professional advice from a qualified financial planner for these matters.

Driving whilst uninsured? You’re not alone!

Have you ever driven unregistered or uninsured?

Have you ever driven unregistered or uninsured?

The minute you realise what you’ve been doing you get that terrible feeling in the pit of your stomach. What if something had happened? To you, or to someone else? And with no cover?

It doesn’t bear thinking about.

Maybe you realised you were unregistered after receiving your fine for over $600 after passing one of 460 NSW police vehicles equipped with number plate recognition cameras.

Did you know, that since the abolition of registration stickers in 2013, infringements have increased by an average of 54%? The impact of this has been much greater on the older generations, those who’ve relied on car rego stickers for a long, long time. Those aged 50-64 experienced a 72% increase in infringements, while those 65 and above experienced an alarming 148% increase in infringements.

Surely people haven’t decided to become wilfully indifferent to protecting themselves and other drivers on the road?

So what is it? An innocent mistake?

Perhaps you realised you were uninsured when you finally opened your weeks old mail to find your registration and CTP reminders, what a fright! You didn’t have that timely and visual reminder that used to be right there on your windscreen (though sometimes not even that is enough).

We may not have our rego stickers to remind us and we may not be good at opening our mail, but having your CTP insurance policy in Advisr is a simple step to help you regain control over your insurance. Advisr sends a reminder right to your pocket, at just the right time, avoiding those nasty fines, or worse yet, being uninsured in a collision.

p.s. statistics say you should let any over 65s in your life know about Advisr too!

 

Note: for statistics used in this article

3 Essential Insurance Policies For Owning Your First Home

Essential Home Insurance Policies

If you’re considering purchasing your first home or just made the big leap, have you considered how you are going to keep your new home protected? Here are a few home insurance policies you should consider.

The following 3 home insurance policies are worth considering to help you keep your new investment safe.

HAVE YOU CONSIDERED WHAT IT MIGHT COST YOU IF ONE OF THE FOLLOWING WERE TO OCCUR TO YOUR NEW PROPERTY?: 
  • Theft
  • Floods / Earthquakes / Storms damage it.
  • Vandalism occurs
  • Accidental damage
  • Impact damage: E.g. Falling trees
3 HOME INSURANCE POLICIES TO CONSIDER
HOME & CONTENTS:

Home and Contents Insurance will help you by protecting the value of your property and the value of your contents; often including appliances, white goods, furniture and clothes that in your new property if something happens.

Why:

Your home and contents are some of your biggest investments. Imagine for a moment the time you’ve taken to earn the money that was required to purchase your home and everything in it.

In addition, first home owners who take out a home loan to fund the purchase of their first property are often required to take out insurance over their home to enable the loan to be approved.

Popular Provider:

Budget Direct: http://bit.ly/2f77McC

NRMA: http://go.nrma.com.au/2vLzZfr 

AAMI: http://bit.ly/2wGf5LO

MORTGAGE PROTECTION:

It is extremely exciting to own your first home but also it is a big responsibility. By putting proper safeguards in place, such as mortgage protection insurance, you can have the peace of mind you deserve. Mortgage protection insurance can provide coverage of your mortgage repayments if you are unable to meet these payments due to an unfortunate event.

Here are three times when Mortgage protection insurance could be useful:

  • You find yourself involuntarily unemployed
  • You are unable to work as a result of an illness or injury
  • You pass away

A mortgage protection insurance policy ensures that mortgage payments will continue to be paid if you are unable to make the payments.

Why:

Mortgage protection insurance provides peace of mind to you and can relieve your loved ones from financial hardship if you in a situation were unable to pay your mortgage payments.

Popular Provider:

Aussie: http://bit.ly/2vmbXas

LANDLORD’S INSURANCE:

Buying your first home for rental income is another path you can take. Landlord’s Insurance makes it onto our list of one of the essential insurance policies for owning your first home because renting an investment property without can leave you exposed to the risks associated with your investment.

Why:

Landlord Insurance can covers both intentional & accidental damage to both the property itself as well as any contents (e.g. dishwasher) that have been included in the lease to the tenants.

Popular Provider:

YOUI: http://bit.ly/2hmAGGo

There you have it! 3 essential insurance policies; Home & Contents, Mortgage Protection and Landlord’s Insurance, to consider when you’ve taken the plunge on owning your first home. These 3 insurance policies can provide protection of your assets, give you peace of mind and provide you financial stability.

Learn more about managing your financial documents with: https://advisr.com.au/organise-financial-documents/

So off you go, enjoy your new property.

Are you considering replacing an insurance policy?

In this Advisr Experts Opinion, we hear from Greg Dobrin, of Sureserve Financial Services, who helps to think through the pros and cons to consider when you are looking to Replace Insurance Policies.

Replacing Insurance Policies

Insurance companies regularly change the benefits and features of their policies to make their policies more competitive.  Insurance companies will often introduce new features to their products to become a market leader. So if you are considering replacing insurance policies, then there are a few areas to consider. 

For example, some legacy policies have features that are unsustainable. For example, the lifetime benefit on some older income protection policies – where the income protection benefit is guaranteed till the person dies or returns to work – modern policies may have an age 65 or age 70 expiry.

Sometimes people will have loadings or exclusions on their policies that may no longer be appropriate, or their circumstances have changed so that the loadings or exclusions may be able to be removed.  Often insurance companies change or relax their underwriting policies which allow clients to take advantage or less conservative underwriting.

Ultimately it is good practice to review your personal insurance policies on a regular basis.  If you are considering replacing insurance policies, the you should always consult a professional financial adviser who will understand the benefits of each policy and ensure any changes place you in a better position.

 

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