Car Insurance Value Too Low

Russ on 29/03/2016 - 09:35
Last edited 31/03/2016 - 01:28

Edit: Thanks everyone, my problem is now solved. Original post continues below:

Apologies if I have posted this in the wrong forum.

My car insurance is almost due, and I have noticed that the insured value seems way too low.

My car is a 1999 Toyota Echo, in good condition, and less than 100k on the clock. I have owned it since new.

Problem is that the insurance payout value is $2400, which seems way too low. The (online) red book figure says $1100-$2400. I have looked around online at used cars, for any Toyota Echos the starting price is $3500 (for one with 250k on the clock), typical prices are in the $4000-$5000 range.

My concern is that if someone runs into me, the insurance company will write off the car, and then I won't be able to buy a similar car with the payout. The type of car I could buy with the payout would basically be a rust-bucket.

I though insurance was supposed to put you back into an equivalent situation after an accident, but as far as I can see, I'll be left in a far poorer situation, and have to pay extra to get back into the same situation.

I rang my insurer, they said the best they can do is increase the valuation to $2470, perhaps the $70 takes into account the "extra" air conditioning that I paid for when I bought the car.

Any advice on what I can do to get my car insured at a more reasonable value, like $4000? Or am I fundamentally misunderstanding the siituation?

Automotive

Comments

  • Daabido on 29/03/2016 - 10:08
    +3

    With an insurance payout that low, pretty much any accident will see your car written off. Plus the insurance company gets to claim your unused rego and of course the insurance payment you have made for the whole year. It's a sweet gig. I'm not sure what you can do about it, except finding an insurer who will agree to an "agreed" amount, which would lead to a higher premium.

    • Russ on 29/03/2016 - 10:59
      +1

      Agreed. Finding an insurer and an "agreed amount" is the tricky bit. I tried Shannons, they said I didn't "sound like an enthusiast" and wouldn't take the conversation any further. All the mainstream insurers appear to use the red book value.

      • Daabido on 29/03/2016 - 15:33
        +1

        I've had the "you don't sound like an enthusiast" slap down too.

        • Seraphin7 on 30/03/2016 - 08:56

          What does that even mean? Are enthusiasts not price conscious?

        • StewBalls on 30/03/2016 - 09:25
          +3

          @Seraphin7: Just tell them you're pretty f&$king enthusiastic about saving some money, so does that count? ;)

        • Russ on 30/03/2016 - 10:42
          +1

          @Seraphin7:

          What does that even mean?

          I suspect it means "we aren't really price competitive, so we target people who have no other option, and charge them higher-than-market rates. You sound like you have other options".

          Without knowing their rates, it's just a guess. But why else would they turn away potential customers?

        • Seraphin7 on 31/03/2016 - 17:22

          @StewBalls: 'Ken Oath!

    • Solarlux on 30/03/2016 - 10:10
      +1

      Yeah, I had similar problem with my hilux insurance, red book values are skewed low when people under-report what they sold their car for to reduce the stamp duty payable, and this plays into the insurance companies hands nicely. I got insurance now which is red book or valuation which ever is the highest, so long as my hilux doesn't burn, I should be able to convince a valuer as to it's once pristine condition.

  • miarn on 29/03/2016 - 10:10
    +15

    When you can buy a brand new i20 for $12k, there's no way your 17 year old car is worth $5k. I would say $2400 is generous.

    The people asking 4-5k are dreaming and will not sell at those prices. Just doing a quick CarSales search I see quite a few under $2k.

    EDIT: consider you may be better off just going third party. I was looking to insure a similar-aged Barina for around $2-2.5k. By the time I paid a couple hundred more in premium, then a $1k excess, then a $400 young driver excess, I wouldn't have been ahead even if I'd written the thing off in the first year. YMMV, obviously.

    • Russ on 29/03/2016 - 11:10

      I have just looked on CarSales.com, which I hadn't done before. Yes there are cars there at that price, but all are private sale, and have either panel damage or more than 200k on the clock.

      I was looking to buy from a dealer, having zero experience at buying second-hand cars privately. That's where I got the $4k-$5k figures from. So now the red book value looks kind-of reasonable, if my car was the average 16-year-old car with 200k+ on the clock and minor damage. But my car is in perfectly good condition, so looking at the prices on Carsales, I would suggest it's worth around $3500-$4000.

      If my car does get written off, is there any way I can buy a second-hand car privately, at reasonable cost, with minimal risk of buying a lemon? I've only heard of RACQ inspections, are they worth the cost and is there a better way?

      • cloudy on 29/03/2016 - 13:10
        +1

        WHen ur car is that old, even if ur mileage is correct, people will hardly believe it. As for any cosmetic perfection or imperfection, the buyers of old cars buy old cars coz they are budget conscious, so small dents don't add or detract value much.

        Lastly, asking price is one thing, the sale price is another. My friend sold his Audi for around 20% than asking price on carsales. And his was the cheapest model in the same year.

  • StewBalls on 29/03/2016 - 10:11
    +1

    Depending on your premium/excess combo, you might be better off switching back to TPPD insurance.

    • Russ on 29/03/2016 - 11:28
      +1

      Comprehensive is $370 for me, but I'd rather be paying $500 and having a $5k write-off value. Of that $370, I am assumung the bulk of that is insurance to cover the cost of damage to the other car and or people, if I was the at-fault party in an accident. So I'm assuming a $5k write-off value will be less than $500.

      To take out the possibility of people deliberately over-valuing thr car and then deliberately writing it off, I'd even be happy if the insurance company would supply the replacement second-hand car, to the same standard as one written off. But no insurance company does that AFAIK.

      I suppose what I really want is an insurer who will actually evaluate the value of my car, based on its true same-for-same replacement value, instead of choosing a figure out of a book.

      • StewBalls on 29/03/2016 - 11:33
        +2

        I suppose what I really want is an insurer who will actually evaluate the value of my car…

        I honestly doubt you'll find one…IME even when you have agreed value the scumbags will try to weasel out of paying…best of luck with it though.

        • BargainKen on 29/03/2016 - 16:50
          +2

          I can vouch, they do do this, they don't like to pay.

      • cloudy on 29/03/2016 - 13:12

        Who wouldn't want to double their value of their car and only pay $130 (30%) more in prem.

  • Mad Max on 29/03/2016 - 10:27
    +2

    My comprehensive insurance was cheaper than 3rd party only. A couple of months ago nrma was offering $100 off comprehensive insurance, but no discounts on 3rd party.
    I got comprehensive and saved about $40 compared to 3rd party only.

  • suchislife12 on 29/03/2016 - 11:56
    +1

    Try Coles Car insurance. They tend to have agreed values higher than all the other companies for some unknown reason.

    • Russ on 29/03/2016 - 20:55

      I am surprised to report that you are correct! I did the online quote, and they'll let me have a valuation of a little over $3500, for under $500 with $650 excess.

      I hadn't even considered Coles, now I'll give them some serious thought.

      • suchislife12 on 30/03/2016 - 03:02

        Good to hear! Coles is a decent budget insurer. They tend to cop a bit of flak online but all insurance companies look terrible on product review. Have had cars with them for a few years and never had a major problem having claimed once. You do need to chase up a bit. The reason why I went with them is because they valued my older car almost $2000 more than anyone else.

        • Russ on 31/03/2016 - 01:26

          I just bought the insurance from Coles. Agreed value of $3k, $650 excess, cost was $361 (including the 15% discount for providing my FlyBuys number).

          So I ended up with a pay-out value $600 more than my previous insurer was willing to give me, and still paid a few dollars less. Excess was a little lower wih my previous provider, $600, but you can't select that amount with Coles, it had to be either $550 or $650 or higher.

  • Ughhh on 29/03/2016 - 12:01
    +2

    No where worth near $4000, maybe if it was a corolla, not for extinct echos.

  • bubbly on 29/03/2016 - 12:55
    +2

    I had a similar problem and got a lousy $7000 for my car which was written off by another person who ran a red light and ploughed into me. I was devastated and missed my car and brought it in near new condition. I phoned around to find the best "agreed value" and premium for my car, i reckon you should do that. I am now with NRMA even though i live in Qld, as most car insurances are dealt with online/over the phone anyway (you don't need a physical store to claim). Some insurers if you sign up online may offer a $100 discount on the first year you're with them too!! Bonus! It pays off to look around is my lesson!! Good luck

  • YaBigGoose on 29/03/2016 - 17:53
    +1

    It's worth maybe $1,500 despite the odometer reading, simply because it's old and parts are a bit hard to get now. What dealers ask for is definitely NOT a good indication of what it's worth.

    For example a dealer would give someone $2,000 for a trade in, then ask $8,000 for that car. Is it worth $8k? No, but they hope that someone clueless will pay that much.

    $2,400 for a 1999 Echo is definitely on the generous side of values.

    • Russ on 29/03/2016 - 21:16
      +1

      someone clueless will pay that much.

      That would have been me, if not for the combined wisdom of OzBargain! I've never bought a car second-hand, so clueless would be accurate.

      Now I'm considering an agreed value of $3k - partly to increase the chance my car will be repaired instead of written off, and partly as a buffer in case a replacement car needs up to $1000 of work shortly after I buy it.

      At the moment my finances are tight, and the small increase in the premium (about $60) is worth it for the knowledge that I'll have enough if the car is ever written off.

  • backpaqer on 30/03/2016 - 15:59
    -1

    If someone runs into you…you are not under the problem of "market value"…they will pay whatever it takes to fix your car (though if you claim through your own insurance to get stuff fixed…you may suffer).

    But comparing apples with apples…I'd rather buy a 2000 Nissan Maxima with 200k+ on the clock than a 1999 Echo with under 100k if we're talking $3000 - but that's just my opinion. Luxury-end cars of that vintage stand up so much better to the ravages of time (I've got two of them!)

    • Mad Max on 30/03/2016 - 16:29

      @Backpaquer "If someone runs into you…you are not under the problem of "market value"…they will pay whatever it takes to fix your car"
      Are you sure? So if you have a $2-3000 car and someone runs into it and makes $5-6000 worth of damage you can demand that they fix it? I thought their insurance would just pay you the value of your car.

    • miarn on 30/03/2016 - 16:42
      +1

      they will pay whatever it takes to fix your car

      Uhh, no. They'll write it off if it's more economical to do so.

      • Mad Max on 30/03/2016 - 16:54

        I thought so. At best you may be able to get them to pay the value of the car and lt you keep the car and have it fixed privately.

        • miarn on 30/03/2016 - 16:55

          yeah, then it'll be recorded as a write off and no-one will buy it :P

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