March 28, 2020

Car Value For Insurance Claims: What You Should Know

Did you know that your car’s value can have a significant impact on insurance claims? If you are looking to get insurance for your car or you have been in a car accident and want to file an insurance claim, then you need to know the following key information regarding car value for insurance claims.

Insurance Claims and Car Value

Insurance claims and car value are inherently linked. The overall value of your car can impact what type of insurance you should get in the event of an accident; it can even impact how much insurance you need to pay, particularly if you are going to get insurance that will directly correspond to the appraised value of your car.

Agreed Upon Value Insurance and Stated Value Insurance

The two primary types of insurance that are impacted by car value are agreed upon value insurance and stated value insurance.

Agreed upon value insurance is insurance in which both the owner of the car and the insurance company negotiate and finally agreed on a determined value for the car; in the case of agreed up in insurance, the insurance company agrees to pay the value of the car in full after a successful claim. Agreed upon value insurance will involve plenty of inspections, appraisals and documentation before both parties will agreed to value.

Stated value insurance, however, works very differently. Stated value insurance is insurance in which the owner of the car provides a stated value for the vehicle to the insurance company. This value must be backed by documentation. The insurance company will then require the car to be inspected after a claim in order to determine the actual cash value of the car. The insurance company will then pay whichever value is the lower amount.

How to Get Car Value for Insurance Purposes

If you need to have your car’s value estimated for insurance purposes, then you can choose several different options. These options include:

  • Third party appraisal companies
  • Book value appraisals
  • Dealership appraisals

Which option is best for your needs will depend on the type of insurance you plan to get; as a general rule of thumb, you will need basic documentation for both stated value and agreed value insurance, but you are more likely to have a stronger case for a higher agreed upon insurance value if you are able to provide extensive documentation from a professional third party appraisal company.

If you decide to have your car’s value estimated by a professional company with experience doing value estimates, then there are a few things to keep in mind. You should look for a company that has professional credentials, experience in car appraisals and car value inspections, and is willing to go the extra mile to ensure that your car value is as accurate as possible.

Remember, car value and insurance claims go hand in hand—so it’s better to have your car’s value professionally estimated right from the start so that you can get the insurance coverage that you deserve.

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