Will I be paid out agreed value if my car is written off and I'm not at fault

Lgoms on 31/12/2013 - 15:49

Hi guys,

My comprehensive car insurance is due for a renewal. I'm thinking of bringing down the premium by reducing the Agreed Value of the car to $3700 which will save me around $150 on $5500 agreed value. It's an old BMW 318is 1994. I love the car but don't want to pay too much for the insurance. I know that if I'm involved in an accident, the car will be most likely to be written off with such a small Agreed Value. However, I'm just wondering if I'm not at fault, will the other party insurer be paying / repairing up to the agreed value of the car with my insurance or will it use the market value of the car, which I believe is around $7000?

Does anyone have an experience with this?

Alternatively, I could go with 3rd party insurance.. but I'm thinking to stick with comprehensive for now.

Any comments will be appreciated :)
Thanks & Happy new year all!!

Automotive

Comments

  • goosegog on 31/12/2013 - 16:16
    +1

    Obviously don't know which company you are currently insured with. However Shannons are good & only insure quality cars as your BMW will be - regardless of its age. We have 4 cars insured through them, unfortunately had an incident apx. 6 years ago when a young "P" plater plowed into us as we were sat at a junction - luckily no injuries. Shannons tookover & paid out the total agreed value of the car very quickly. This is why we have stayed with them for years.Give them a go - it doesn't hurt to ask questions to find out if they would be good for you.

  • maybeamacy on 31/12/2013 - 19:09
    +1

    I believe they pay you the agree value - at least that's what happened to me where my value was quite a bit higher than market. Is a 318is from 1994 really worth $7k….

  • Roary on 31/12/2013 - 19:42

    If you are not at fault then the other person insurance must either fix your car or pay you out market value.
    Your comprehensive insurance should not come into it and you should go through their insurance company.

    • Brooklyn99 on 31/12/2013 - 22:00
      +2

      In the event of a accident, you need to contact your insurance. They will then need to assess the damage to your vehicle. After the assessment, be it a write off or repair, they will then contact you on their findings and provide you with an offer.

      Your insurance is responsible to chasing up with the other party's insurance for payment. You contact the other party's insurance ONLY IF you have NO insurance and you were NOT at fault.

      • airzone on 01/01/2014 - 00:24
        +1

        Indeed, if you have comprehensive insurance, don't stuff about… Just let them deal with it.

        • Noblejoker on 01/01/2014 - 10:29

          Mediam0de and Airzone are right - I believe Cardz advice is poor
          You pay for insurance to help you
          In your case you have agreed the value of your vehicle assuring you of what you will receive
          If you rely on the third party to pay you out then you leave the transaction up to them
          some insurers treat third parties quite well - but not as well as the customer who pays them
          You will wait longer for yor vehicle to be assessed, values offered will generally be lower and repair wait times longer as you are not their first priority

          Shop around for the best deal overall and insure yourself
          And remember that price isn't the only comparison

        • Roary on 02/01/2014 - 12:32

          What are you saying my advice is poor.. Its completely accurate.
          If you have an accident which you are not at fault you do not need to go through your insurance. I know I have recently settled an accident my wife had who is not at fault.
          If you dont know dont guess and say other peoples advice is poor..

          Agreed value if you go through your own insurance
          Market value if you go through their insurance. You dont even need any insurance if you are going through their insurance.

          And thats all rubbish about wait times longer, valuations less.. What a load of dribble!

    • goms on 06/01/2014 - 21:08

      This is what I thought too. If the agreed value is less than the market value, it's not fair to be paid out the agreed value when you are not at fault. The argument is in this case you'd be better off having no insurance.

  • Brooklyn99 on 31/12/2013 - 21:49
    +3

    I had 2 write offs before. First was with AAMI and second with Coles. Both not my fault and both insured at market value and I was paid the market value within 2 weeks. It was significantly lower than cars of the same year and model on carsales.

    If your policy states agreed value, then your insurance will pay out the amount of the agreed value minus any remaining outstanding premium fee.

    If your policy states market value, then your insurance will pay out the value of the market value minus any remaining outstanding premium fee.

    I doubt your 1994 BMW 318is is worth $7k. Checking carsales, it is worth between $4k-$5k. If going by market value, your insurance will use the lowest value and minus at least $500 so you'll probably only get $3,500 so it's best sticking to your agreed value

    Hope this helps.

    • outlander on 06/01/2014 - 21:23

      Agreed it's a total rort. My mum has a '88 toyota with comprehensive insurance. It's up for renewal in a week, $350. But the car is so old the market value is less than the excess! Any claim you make you're going to end up owing them money. What a laugh

  • Steptoe on 31/12/2013 - 22:43

    Have you considered Third Party, Fire and Theft eg. NRMA?

    • goms on 06/01/2014 - 21:09

      Yep have definitely considered this. But I might go for a comprehensive for one more year.

  • anna10 on 01/01/2014 - 09:37

    Lots of ins companies offer 3rd pty, fire and theft. Good for low value cars.

  • Hellfire on 01/01/2014 - 14:03

    If you are involved in an accident and not at fault you have 2 basic options:

    1. Claim through your comprehensive insurance and you will be paid out as per the conditions of your policy/PDS. In your case this is the agreed value you have selected.

    2. Claim directly from the at fault party. This involves writing a letter of demand to them and including the value you wish them to pay. You can include the cost of hiring a car until you have settled.

      • If they have insurance you'll usually be directed to deal directly with the insurance company who will make an offer. You don't need to accept this and can negotiate. Typically you'll get around the market value of the car.
      • If they don't have insurance it can get very tricky and you may need to take them to court. You'll typically get the market value but it may be paid in instalments if the other party doesn't have the capacity to pay and it may take a long time to be resolved. You may also have legal fees to pay if you need to go to court.

    Option 1 is the easiest but you may want to go Option 2 if they are insured and you don't have a very favourable policy (eg low agreed value, no hire care option)

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