Insurance: declaring the value of your vehicle?

[Sponge]

It's approaching that time of year when I'm getting quotes for car insurance. One of the questions asked is what your car is worth. I got thinking about this and wondered what the best answer would be?

Is 'market value' a valid response? (Not much use with an online form.)

Should I simply quote what I paid for the car? But is that the pre-discount price or not?

Should I answer with the current 1yr old value of the vehicle? Adjusted for mileage, condition, etc. (If I did this, would it make the premium lower?)

If it makes any difference, I have GAP insurance.

The matter reminds me of a time when I was getting quotes for motorcycle insurance. When I bought the bike I got a years free insurance and come renewal time was asked what the value of the bike was. I simply told them the price I paid. I got into a heated debate with the CSR who insisted it shouldn't be the price I paid, but an adjusted price taking into account age, mileage, condition, etc. I said I was qualified to suggest such a price (I genuinely didn't know) so he made a figure up there and then!

I didn't like this, plus the premium wasn't very competitive, so stuck with the renewal premium (which still had the price I paid for the bike listed).

I realise come a pay-out, they'd probably still offer less than market value, but as far as calculating annual premiums what is the best way to approach this matter?

[Milo]

I don't think it make any difference. Most just ask something like "is it under 50k?"

In the event of a total loss, the figure they would offer you would be what they considered to be the market value. That's when the fun starts and your GAP insurance kicks in

[P_G]

Milo's got a point, doesn't matter if your car is past a year old what you put down, tyou will never get the value you have insured it for. The worrying thing is that if you put half the value in that you want to actually insure it for your premium would be reduced and this is probably what the loss adjuster will give you as an offer.

After that it is for YOU to prove what you car is worth, WHAT THE FECK FOR!

It is the one thing I believe to be completely screwed up about the insurance industry. That and you don't get your money back after a number of years trouble free motoring because you are paying for every other uninsured tosser!

[Sparticus]

A few years back I had my Mk4 Golf Gti insured for £12,000, never bothered to change that value, even though market value was £6000.

It was stolen, NU paid up and I was staggered to be offered £9000. Cannot make sense of any of that.

Car was found undamaged in a lock up in Luton, I offered to buy it back for £3000 but they would not do it. NU sold it on to a dealer for £1500.

So insure your car for market value plus 25% at least.

[R32Ash]

It's funny (not) how they charge more for a policy based on the value you give them, even though they'll only pay out on what they consider to be 'market value'.

Try getting a quote with a value of £19,500 and another at £20,000 off the same company. I did that a year or two ago and it was something like 10% more expensive at the higher value. But why? They don't base the risk on what you say your car is worth surely?

[Sponge]

[ QUOTE ]

It's funny (not) how they charge more for a policy based on the value you give them, even though they'll only pay out on what they consider to be 'market value'.

Try getting a quote with a value of £19,500 and another at £20,000 off the same company. I did that a year or two ago and it was something like 10% more expensive at the higher value. But why? They don't base the risk on what you say your car is worth surely?

[/ QUOTE ]

Everyone has made valid points (thanks ), points which led me to ask this question.

Presumably, the premium is partly based on the value of the item being insured. So if I say it's worth, say, £25k (RRP) the premium should be higher than if I quoted what I actually paid (10% less), or even what the car is now worth (whatever that is).

Then the insurance company completely ignores this figure and makes you an insulting offer well below market value! (Unless your name is Spartacus )

It's a condition of my GAP insurance that I don't consider any offer by my insurance company and that they have to agree to it first. Presumably because they're going to be making up the difference and the more the motor insurance company pays out, the less the GAP insurance company has to pay out.