Car insurance policies are sometimes difficult to decipher, leaving many motorists – who perhaps don't have the time or inclination to read the small print – to trust some of the basic information provided upon policy purchase.
One of these basic pieces of information is the 'insured value'.
Many drivers are under the misapprehension that this is the figure that will be paid out by an insurer if their car is ever written off.
However, that is often not the amount given.
The insured value is merely what you as a driver think your car is worth. But what providers are prepared to pay out is the 'market value' of your vehicle just prior to the incident which causes a claim – and what you consider to be the market value may be much lower than what your insurer thinks it is.
The insured value is usually only paid if the policy is of an 'agreed value' type. And in most cases only classic cars get this – for, as you might have expected, an extra premium.
What do I do if I think I’ve been given an unfairly low amount for my car?
The best option is to appeal to your insurer which will review your case in full and will also provide you with details on how you can escalate your appeal. At each stage, please ensure you ask as many questions as you can to help you understand their decision, or you may just find the same answer if you take the full escalation process and finally approach the Financial Ombudsman Service. .
What about gap insurance?
With more drivers aware that the 'market value' is normally less than the insured value (‘gap insurance’) has flourished. For a modest premium, this cover bridges the gap between market value and insured value, as well as normally covering any withstanding payments on the vehicle.
If you do opt for gap insurance, you should ensure that it covers you for the difference between the price you paid for your vehicle, as well as the insurance pay out you will actually receive – not the 'insured value'.
Thankfully, not all car-related insurance is so complex or so hard to get a good deal on. Here at startrescue.co.uk, we offer superb value car breakdown cover for a price that you'll love.
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