Why Insurance Market Value Is Nowhere near Actual Market Price?

monkeyfood on 11/10/2022 - 20:16

I have a 2006 Mitsubishi Lancer Evo, yes I know in the last few years this type of a used car the prices have gone crazy. However I have owned my car for 10+ years my current insurance market value is around 12k, when I am looking at quotes other insurance companies aami and racv don't let me chose a agreed valued higher then 12k. I know this is inline roughly with red book value but there is no chance can replace this car for this little money.

I wondering what do you do if the worst happens and the car is written off?

I do realise there is low stock so prices are high, but if I want to replace this car with roughly a similar one id be looking at 50k used.

Taking all the facts into consideration I do understand supply/demand, inflation, covid shortages etc etc but as a full insurance paying customer I also just want to insure my car for the value that it will cost to replace it in the current market, whatever it may be at this point in time.

I hope I never find myself in a situation that I have to fight and argue for this but what are people's experiences in this situation?
What is the best preventative measures for worst scenario?

Automotive Car Insurance Insurance

Comments

  • brendanm on 11/10/2022 - 20:18
    +2

    Call Shannon's. However, they won't show you "market value", so not sure how you know this is $12k? Market value is literally what it would cost to buy a similar car, can't be capped at $12k arbitrarily.

    • monkeyfood on 11/10/2022 - 20:22

      This is direct copy from aami quote online
      You can insure your car for an amount between $7,275 and $12,610

      Please check the amount of cover meets your needs

      obviously it doesn't meet my needs, but can't enter higher

      • spackbace on 11/10/2022 - 20:27
        +1

        Well that's agreed value, not market

        Market value, according to redbook:

        I'm Selling
        Private Price Guide
        $26,700 - $31,300

        The market on these is nuts, considering Evo X's are starting at $27k

        Is this just due to the Grand Tour?!

        • bloom on 11/10/2022 - 20:32
          +1

          Cheers just bought this one
          https://www.carsales.com.au/cars/details/2007-mitsubishi-lan…

        • brendanm on 11/10/2022 - 20:36

          considering Evo X's are starting at $27k(carsales.com.au)

          That's not an Evo X 😉

        • Hybroid on 11/10/2022 - 21:26

          Is this just due to the Grand Tour?!

          Rarity. They had a strong following back when they were battling it out with WRX STIs & before modern German hot hatches were on the scene, then the Fast & Furious craze increased it exponentially.

          In 2016 Mitsubishi declared it was being discontinued and there was a mad rush to buy them and store them for resale.

          The prices are high but no one's really buying them for that much. It's wishful thinking.

          • spackbace on 11/10/2022 - 21:49

            @Hybroid: But it's moreso that the evo 9 shape are asking more than evo x…

      • brendanm on 11/10/2022 - 20:35
        +1

        That's agreed, not market. If you insured at market value, you will be paid out the amount needed to buy another car the same, it just may require a bit of to and fro. Or, call Shannon's, who deal with this sort of thing all the time.

      • salmon123 on 11/10/2022 - 20:35
        -1

        You can insure your car for an amount between $7,275 and $12,610

        That means "Agreed value" between $7275 and $12610. As above, they wont disclose what market value they will pay, if you select "market value". "Market Value" policies are typically cheaper than agreed value, so you can guess what they might pay with a "market value" policy. I'd say around 10k.

        You can see what the range of agreed values is with other insurers, some might go slightly higher than $12610, but you might not like their premiums.

        but if I want to replace this car with roughly a similar one id be looking at 50k used

        Insurance will never pay you 50k, because your 12k car was written off.

        what are people's experiences in this situation?

        Assuming it's a not-at-fault claim, you can still pursue the other driver (and their insurer) for any short-fall between what they pay out and your actual loss is replacing the car. It wont be 50k, but you might get a total pay-out of 15k (10k from your insurer and 5k from the other driver).

        What is the best preventative measures for worst scenario?

        Drive safely.

        • monkeyfood on 11/10/2022 - 20:59

          Insurance will never pay you 50k, because your 12k car was written off.

          How do they determine the 12k figure tho? If all the same model cars are selling for 30k+ why is it still a 12k car?

          I try to drive as safely as possible, there is alot of instances on the road I get the impression others around me might not be doing the same :(

          • salmon123 on 11/10/2022 - 21:19
            -1

            @monkeyfood:

            If all the same model cars are selling for 30k+ why is it still a 12k car?

            The 30k sales could be a temporary anomaly. Insurance companies don't update their market values every day/week/month. If it's a permanent change in the value of the car, they might eventually update it, but who knows how long that will take. They'll also update the insurance premium accordingly.

            If you look around hard enough, you'll probably find an insurance company that will insure your car for 30k (think about all those cars with modifications/customizations/etc), but as I said you probably wont be happy with the premium.

    • AustriaBargain on 12/10/2022 - 01:42

      fwiw I've known a few people who worked at Shannon's and they claim it has a really negative and anti-consumer culture behind it, they found it mentally exhausting to be lying to customers and cheating them of money instead of actually helping them with good insurance. You have to remember that any kind of profitable company can afford to buy slick and memorable ads on TV. A funny ad with good production value tells you nothing about what dealing with a company will really be like.

      • brendanm on 12/10/2022 - 07:43

        They gave me a very competitive quote on my car, are an actual Australian call centre, and no hold times.

        • AustriaBargain on 12/10/2022 - 08:48

          But when you made a claim was there any issues at all?

    • HeWhoKnows on 12/10/2022 - 20:01
      +1

      Market value is a huge scam

      We just bought a 2001 Mazda Tribute Autoamtic privately for $3500.
      It had 144,000km, original owner, 2 original keys, no accident damage, great interior, 6 months rego, drove great!
      Doesnt get any better
      Asking price was $4,600 with no other Tributes even coming even close.
      Youd think Market Value should be around $5,500 based on Dealer prices

      Anyway 18 year old family member had an accident 4 days later and they wrote if off.
      Excess was $2,700 and they said, thats market value so nothing to get back.

      Seriously?????????????

      • brendanm on 12/10/2022 - 20:28

        You have to argue over market value. Though having Mazda tribute written off is a blessing in disguise.

        • HeWhoKnows on 16/10/2022 - 18:50

          When you cant find one under $5000 with these low kms and 6 months rego its an easy argument
          You just tell them to point out 3 or 4 of them for sale since market value is not the price of an individual car
          Insurance companies will never offer you the best price first up
          Its always negotiable - you must know this in such situations

  • Euphemistic on 11/10/2022 - 21:24
    +1

    Find a specialist insurer, like Shannon’s.

    You either take what the big insurers will give you, or try the specialists.

    You can argue the point with your insurer, they play a numbers games offering a depreciated value of the vehicle based on original value less a percentage each year. They pretend not to understand collectibles.

    • magpuy on 12/10/2022 - 11:26
      +1

      Most of the "consumer" insurers aim their products at the "run-of-the-mill" vehicle owner. they don't want to insure exoctic/special/unusual/weird/collectible as they cost too much to repair, which will drive premium costs up.

      The whole idea of insurance is to spread the cost of a claim over as many other "members" as possible, wile still turning a profit.

  • knasty on 11/10/2022 - 21:27
    +2

    Try enthusiast.com.au. I also have a 2006 vehicle and they were great in matching its real market value with an agreed value. Normal insurers only deal with vanilla scenarios.

    • monkeyfood on 11/10/2022 - 21:36

      thanks I will give it a go

    • RMBC on 12/10/2022 - 08:44

      Seconded, had a great experience, and price with a modified car

  • kerfuffle on 11/10/2022 - 21:37

    what do you do if the worst happens and the car is written off?

    Negotiate on and take the settlement, order a new car and wait for it to show up in the next decade.

    Source: mine got written off back in April and I'm not paying new car prices for a used one.

  • SBOB on 11/10/2022 - 21:41
    +4

    Just make sure it's insured before you drive down a dead end dark tunnel….

  • apsilon on 11/10/2022 - 21:42

    As others have said, go with a specialist insurer and agreed value so there's no surprises. My '97 MX-5 is insured for $30k and only costs $30/m

    • lordra on 12/10/2022 - 11:16
      +1

      You have fully comp for $360 PA? WOW!

      • apsilon on 12/10/2022 - 12:56

        It's on limited use as it's not my daily. Another advantage of using a decent insurer.

  • randomusername2017 on 12/10/2022 - 00:39
    +1

    If you're worried about insurance payout parity, cash out at 50k+ and opt for a Badge More Widely recognised by insurers.

  • peteru on 13/10/2022 - 00:33

    As far as most insurance companies are concerned, it's a petrol burning metal box that has a certain passenger and cargo carrying capacity. They insure you for about the amount of money it would take to buy something that does a similar job. They don't care about any style or aesthetic value you may attribute to your vehicle.

    If you want insurance that takes into account your values, then you need to find a non-generic policy that insures the things you value.

    It may not seem fair to you, but it's a trade-off you make when shopping around for policy based purely on price and mass market appeal. If you find it challenging choosing the right policy, consider using an insurance broker and tell them what matters to you so they can find a policy that matches your individual needs.

  • Shiq1 on 17/10/2022 - 22:37

    I have a few rare Porsches insured at their increasing values.

    I go through Metrix Insurance. Essentially an insurance brokerage who will shop around for you at the market value that you dictate. Haven't had any issues with them but haven't yet made any claims. I think my current policy is written by Allianz but I do get the policy papers each year and sometimes they'll tell me I'll have a km cap, next year there isn't.

    previously used Shannons (lol what a joke - Hey we're going to double your $3k premium next year [for 1 car] because that's a good thing) and lumley (premiums went up like the e constant).

    good luck

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