Car Written off. Agreed Value Is Less than Market Value

gonan on 18/03/2022 - 18:00

Hi,

I bought a 2013 i30 tourer 45k 3.5 years ago for 16k. Drove it to 85k and crashed it last week.

Comprehensive insurance with RACV and not at fault.

When I insured it 3 years ago I insured it on an agreed value of 16k. I didn't notice that the agreed value dropped each year even if the premium didn't change…

Now my car has an agreed value of 12k and is a write off.
To buy the same car today (2013 i30 tourer 85k) it would still cost at least 16k as 2nd hand car are getting more expensive.

Do you think I can negociate a payment higher than the agreed value or am I dreaming?

Got good service history, recent repairs (new brakes and tires), and even a $1000 paint job 3 months ago, the car was definitely worth more than 12k.

Cheers

Automotive

Comments

      • Oofy Doofy on 18/03/2022 - 22:05
        -5

        By inspection and negotiation.

        at this point, most vehicles that are 10 years old have done at least 15k per year, 10k per year at the lower end and 20k or so at the high end.

        • randomusername2017 on 18/03/2022 - 22:13

          Exactly..150-200k maybe not selling for 16k.
          Low km 10 yr old vehicles are attracting an insane premium here in Sydney ( not sure about elsewhere).

    • gonan on 19/03/2022 - 01:14

      Look on carsales for a i30 >2013 (2012 was an older model) wagon body.
      If you can find me one at 8k in Vic DM me straight away please.

  • naruto128 on 18/03/2022 - 21:48
    +2

    I was rear ended and since it is an old car worth maybe 9-10k market value before COVID I was hoping for it be declared a total loss and paid out by the other party's insurer. But the insurer says the car market value has now gone up to abt 12k. Since the repairs cost around 11K they will pay for the repair so I was lucky in a way considering the 2nd hand car market is way over priced and I cannot wait 12 mths for a new car.

    • Fobsessive on 21/03/2022 - 18:51
      +1

      11k repairs for a 12k car is lucky to get

    • wtfnodeal on 22/03/2022 - 21:54
      +1

      I would have said give me $11k and I will sort out the repairs myself.

  • katykat on 19/03/2022 - 00:17

    I was caught out this way last year. You should be claiming through the at fault party's insurance which would then give you "market value". If you claim through yours you have no leg to stand on and will only get agreed. Having said that, AAMI lowballed market value for me and would only pay out at the top of the Redbook value… 3k below prices at the time. With the way covid pricing is going you'll probably still be short, but it will be closer than the agreed amount at least.

    • gonan on 19/03/2022 - 01:25

      Thanks.

    • lachhelix on 19/03/2022 - 01:26

      "AAMI lowballed market value for me and would only pay out at the top of the Redbook value… 3k"
      How did you overcome this? Did they end up paying more?
      If you don't mind me asking

      • Oofy Doofy on 19/03/2022 - 03:09
        -1

        He said the at fault party's insurer should pay out 'market value', but I'm not so sure about that. One insurer to another can still explain particulars of their PDS, so that you may only get the agreed value as stated by your own insurer.

        • terrys on 19/03/2022 - 17:42

          "One insurer to another can still explain particulars of their PDS, so that you may only get the agreed value"

          How do you figure that out? There is no protocol or rational whereby the insurance company, acting as the agent of the at fault driver, can demonstrate that their responsibility is contingent in any way on the agreement between the claiming driver and their insurance company.

          That it is the same company makes sod-all difference. They are two separate contracts.

          • Oofy Doofy on 19/03/2022 - 17:46
            -1

            @terrys: Do you really think the other insurer, let alone your own, would let you get away with a market value appraisal (same circumstance as the OP)? I think it would be difficult for the insurer to ascertain an actual market value, although I have seen them use a % calculator based on Redbook information. In saying this, even Redbook is only a general guide as for price range, km etc…

            • SBOB on 19/03/2022 - 18:08
              +2

              @Oofy Doofy: at fault party needs to make the impacted not-at-fault user 'whole', as they were prior to the accident.
              If their offer does not allow the OP to replace a car with like for like, they can show why not, argue their point, and if they are not satisifed, take it further.

              Their insurance (and the selection of agreed value v market value) is irrelevant when claiming against the at fault users insurance. The only hurdle is it means they are on their own and have to do the chasing, vs having their insurance deal with it (and therefore end up with agreed value and the financial loss this will result in)

              • Oofy Doofy on 19/03/2022 - 18:11

                @SBOB: Seems to me, from reading the comments and knowing real life examples, most people can't be bothered and just go with the easiest option.

                This is the reason I have a second vehicle.

      • katykat on 19/03/2022 - 16:23
        +1

        I didn't unfortunately. I considered applying to the AFCA for a review but in the end didn't bother. Part of the issue was that whilst my car was very common (2009 Hyundai i30) I had a SR model which is top of the range and not as common as the lower of mid range models. When I got prices from Carsales at the time, there were only 5 of the same model year for sale in Australia and none of them were equivalent kms so it was hard to judge a fair price. I put my offer at around the top OF what was advertised because my car had about 30k less km than most of the others, but AAMI played hardball and at the time I wasn't in the right frame of mind to deal with them so I caved.

        I do regret it. I guess I just don't trust that I would win against the insurer.

  • pdperth on 19/03/2022 - 11:09
    +1

    Insurance companies will always negotiate the best outcome for themselves. If you disagree ask for an internal review. If that doesn't work seek external review by afca if less than $15000. It will take a lot longer I presume but maybe the threat might help then settle better.

  • jrvb42 on 19/03/2022 - 11:44

    If you are not at fault, it's not your insurance that matters. You (or your insurer) CAN claim the market value and more (inconvenience, rental car, etc) from other insurer. Because you have agreed value, and it's the same company, they will most likely try to rip you off and only offer agreed value. Get all that's reasonably owed. Personally claim against the at-fault party's insurer. Just because they are also your insurer doesn't matter.

  • Haulien on 19/03/2022 - 15:24
    +3

    In the future, always set your agreed value to much higher than what you paid for it for instances such as these. Paid $3K for the car and its insured at $12K. Was an extra $60/year. Probably not worth it but 🤷🏼‍♂️

  • Vote for Pedro on 20/03/2022 - 17:03

    If you’re not at fault, what’s your insurance agreed value got to do with it. You don’t have to go through your insurer. If I’m not mistaken

  • Alexxx on 20/03/2022 - 17:35
    +1

    As others said you weren't at fault so you should be able to get the current market value.
    If your insurance questions you about it then just tell them the 'agreed value' was lower a you were willing to take a loss if you were at fault, it's a different matter if someone else is at fault.
    I don't insure my laptop and if I break it too bad for me but if someone else was responsible then I would expect them to pay the value that it could have been sold at.

  • cbs78 on 20/03/2022 - 18:09

    Interesting that market value premium is cheaper than agreed value. Would it make sense to switch given the high used car prices?

  • RolandWaites on 20/03/2022 - 19:15
    +1

    Where'd you get a $1000 paint job??

    • ribze1 on 20/03/2022 - 19:39

      Agree, i always thought it was thousands.

      "The average car respray cost in Australia is between $1,500 to $3,000 (including GST) for small to medium-sized vehicles with minimal bodywork while larger vehicles can cost $3,500 (including GST) or more."

    • gonan on 20/03/2022 - 21:53

      Just 3 panels, not the whole car. And that was the 3 panels that got smashed later in the accident…!

  • ribze1 on 20/03/2022 - 19:38

    Imo you should use market value unless it has modifications or had a significant amount of work done to it which would get overlooked by an insurer.

    • gonan on 20/03/2022 - 21:54
      -2

      Yeah I'll know for next time. When I bought the car the agreed value option was only a tiny bit more expensive, so it was worth it at the time.

  • No ONE on 20/03/2022 - 20:46

    my car has an agreed value

    Shocker!

  • meong on 20/03/2022 - 21:59

    i'm confused, but i thought agreed value will always stay the same whereas market value may fluctuate (usually goes down) with the market?

    • gonan on 20/03/2022 - 22:15

      At every renewal RACV dropped the agreed value on my policy. But now my car is worth more than I paid for it 3.5 years ago.

      • meong on 21/03/2022 - 11:05

        yeah i know that it happens to you like that but im still confused with what is an 'agreed value' cause i expected that to stay to whatever was agreed and will usually reflected on what i pay to the insurance companies…

        • Davo1111 on 22/03/2022 - 02:00
          +2

          Agreed value is what you think the vehicle is worth if it was written off - in that CONTRACT period.

          At the end of the contract (usually 1 year), the insurance company adjusts what they believe the agreed value should be. If you dont agree, you either go elsewhere, or enter a different agreed value. (capped)

          They dont want a 3k car being insured for 13k, otherwise the person might be inclined to write it off. i.e. they could buy a similar 3k car and profit 10k

          I think you're getting confused, after a contract expires, a new contract (even if auto renewal) takes place. Even though it's the same vehicle, consider it a completly seperate agreement.

  • CalmLemons on 20/03/2022 - 22:47

    Ozbargain should really pin some of it's post threads on lifelessons.com or something lol

  • Drakesy on 20/03/2022 - 23:05

    Hokay
    1st you're not at fault meaning it doesn't matter how your insurance values it.
    It's about how their insurance values at (they're the ones paying out), now they'll offer you a price (generally a lowball to get you to go away.)

    Bring up carsales/Gumtree/Marketplace, get similar models with years km's and send them the selling prices.
    They'll go back and forth until you get a replacement value

    SIMPLEZ

    • gonan on 21/03/2022 - 10:58

      That'd be easy but we both have the same insurer!

      • Drakesy on 21/03/2022 - 12:27

        But you don't need to deal with your insurer?

        You're not making a claim through them

        • anzacpaul on 21/03/2022 - 15:25

          Both parties are insured with the same company (ie AAMI and AAMI).

          So of course the insurer wants to pay out as little as possible.

  • Misha Bakunin on 21/03/2022 - 08:37

    Ok maybe I'm a noob, but how can the aggeed value keep going down if we agreed to it by contact? I just realised mine had gone down over the years and I'm paying more….

    This is despite my car actually being worth more than it was when I signed up.

    If this is he case is market value a better choice?

    • holdenmg on 21/03/2022 - 09:48
      +1

      Pretty easy really.

      Each year you receive a Renewal.

      You either renew on the Terms on offer, vary the Terms/Sum Insured by mutual agreement or let the Policy lapse.

      Compare both Market and Agreed and see what each cost.

    • The General on 21/03/2022 - 10:56
      +1

      This is what is commonly known as Lazy Tax.

      They increase your premium and rely on you just renewing without reviewing it. Shop around and get a better price, then call up your insurance provider and ask them to match it. Chances are they will as they know you have caught them out and have already done your ground work to switch.

      Same goes with other insurances and home loans.

  • Wyn-Ryder on 21/03/2022 - 10:10
    +1

    Look at the PDS. It should be market value, example 6 (assuming PDS is: https://www.racv.com.au/content/dam/racv/documents/insurance… )

    6 Insured motorist damage –
    Total loss – page 16
    Your vehicle is damaged in a collision with another vehicle and the driver of the other vehicle is totally at fault for the accident and insured for the damage.
    The market value of your vehicle in its undamaged state is $4,200 and the value
    of the damaged vehicle is $100. There is an administration fee of $300. You are not registered for GST.
    we pay you $3,800 ($4,200 - $100 - $300)
    You will keep the damaged vehicle.

  • jmagic0 on 21/03/2022 - 10:27

    Classic oz bargain post at its finest!

  • [Deactivated] on 21/03/2022 - 10:45
    +1

    New brakes / tyres and your $1000 paint job do not impact the payout. Brakes and tyres are consumables and do not contribute anything to the payout. You could mention this to the insurer but they have no obligation to take it into consideration of the payout. It would be a catch 22, because they could also then deduct from your payout if you had old tyres / old brakes etc.

    • Sammyboy on 21/03/2022 - 15:04
      -1

      If you had new tyres on the car, would you be able to take the tyres off the car, once it has been assessed to sell them? Especially if the car is going to be written off.

      • [Deactivated] on 21/03/2022 - 16:46

        Depends on the insurer and the agreement you come to with them. If they let you keep possession of the car (they generally don't) then you can do whatever you want. If they keep the car as they are entitled to do as part of your contract, they would be trying to recover some of that money by selling it to wreckers / for scrap etc etc.

        Generally once a car has been written off and insurer is paying you out they now own the car, if for some reason you want to keep a written off car that can't be re registered they would reduce the payout accordingly.

        If the car was still being driven and was a financial write off you could in theory swap the wheels out and sell them, i say swap because if the insurer takes possession of the car after they have written it off and it has no wheels they may or may not have some follow up questions. Whether they notice you swapped the wheels or even care, well who knows.

      • Davo1111 on 22/03/2022 - 02:02

        go read your contract. they take posession of the car and anything that isnt bolted down.

        You can offer to buy it from them, but they have no obligation to accept.

  • Dalton on 21/03/2022 - 12:20

    Hard to believe that, in the case where you're not at fault, you're worse off having full-cover 'agreed value' insurance than you would be with no insurance at all.

    • Drakesy on 21/03/2022 - 12:29

      Not really,
      It wouldn't be his insurance that get involved and pay out.

  • MITM on 21/03/2022 - 16:15

    Usually you'd go through your insurance to save you all the grief. Your insurance company will pay you the agreed value. The at fault insurance company will pay your insurance company market value. You'll get a pay out pretty quick and your insurance company will make a profit from your misfortune.
    Or you could use a solicitor to write a "letter of demand" to the At Fault insurance company for "$X" according to your research + legal costs + car rental. Pay out may take a while.
    Don't forget to cancel your insurance after pay out as you have no car to insure.

  • Davo1111 on 21/03/2022 - 16:52

    "Agreed". Curious what you think that means

  • DarkOz on 21/03/2022 - 20:19

    The agreed value always drop each year and if you don't agree with that you should have asked for it to be increased to the market value. That usually means you will be paying more.

  • striker5950 on 22/03/2022 - 09:41

    agreed value = 12k
    this must be a troll post lol

  • apu on 22/03/2022 - 14:29

    OP, I find your post interesting. I haven't read the thread in detail but looks like you are with IAG? My insurance (also IAG but a different reseller) agreed value actually went up by $3k between last years and this years renewal (with a very similar premium).

    • gonan on 22/03/2022 - 14:44

      IAG but signed with RACV.

  • umoddbro on 22/03/2022 - 22:18

    Not sure if people are getting better at trolling or actual clueless…..

  • tomcat83 on 23/03/2022 - 08:05

    I could live with the agreed value when my 86 had a branch fall on it in a storm a few years ago; what pissed me off more was that the insurance assessor took off the 10 months of prepaid registration from the agreed value as "you can claim that back from the government". Now I pay my registration monthly.

  • michaelTito on 23/03/2022 - 10:18

    Maybe it's time to sue them?

  • gonan on 25/03/2022 - 16:43

    Thanks a lot everyone for the help, RACV confirmed that I'd get market value for my car, which should be more than I paid for it 3.5 years ago!

    • slayer4109 on 14/02/2023 - 21:56

      I'm in the same situation…..
      How did you get the Market Value instead of Agreed Value?
      Thanks mate.

      • gonan on 15/02/2023 - 05:15

        Just read the thread, I was not at fault so claimed against the other party insurer

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