Car Insurance Breakdown
Market Value, Agreed Value & Learner Drivers
Car insurance overview
Love your car? Take care of it, keep it clean, get it serviced regularly and make sure that your car insurance provides the coverage you require. As you consider car insurance, one option is whether you want to have your car insurance with either agreed value or the market value. Agreed value or market value can determine the payout amount if your car is either stolen or written off. Either car insurance option, market value or agreed value, has different benefits and implications, so it is worth you considering your personal circumstances and an insurance broker can help you determine what is appropriate for you.
Car insurance - What is Market Value?
Car Insurance Market Value is an insurance industry term that values your car at the rate it would be sold for or bought for on the open market, at the time when you are making an insurance claim.
As car values change over time, if you claim on your car insurance using market value, then the market value of your car is determined at claim time and this market value may vary from your expectations.
How is market value determined?
Market value rates are determined by your insurer. Insurers determine the market value of your car at a time just prior to your car insurance claim.
Sometimes a market value rate can be lower than an agreed value and as such car insurance premiums, with market value applied, may be lower than an agreed value car insurance policy.
Car Insurance - What is Agreed Value?
Car insurance agreed value is where the value of your car when being insured is pre-determined and fixed. Your insurer and you agree on the value of your car when you initially take out your insurance and at each renewal of your car insurance policy.
Agreed values can often be higher than market values as individuals may be concerned about the depreciating value of their car and reflect more upon the cost of purchasing the car initially.
Car insurance premiums may be higher when agreed values are applied. Higher premium costs are due to the greater level of certainty and value provided to the individual.
What about car insurance for learner drivers?
Learning to drive is a rite of passage. Yet, as you take a learner driver for a drive in your car, you need to check whether your insurance coverage provides learner driver coverage for your car. If the learner driver in your life was to have an accident would you be out of pocket? Comprehensive car insurance may provide coverage for learner drivers using your vehicle, however, it pays to clarify your coverage BEFORE you embark on your first drive with your learner. Learning to drive is stressful enough for both the learner and for you!
If you need assistance with your car insurance or want further insights into how either agreed value or market values are determined. Connect with your insurance broker.