Stated Value vs. Regular Coverage Insurance

I'm working on an article that explains more in detail, but here's the basic points.

Standard disclaimer: I'm only have an insurance license in TX, so I can't give across the board specific advice... This is for informational purposes, if you have any specific questions PM me.

If you want to drive your car to work, ever, even on a Saturday when it's 72 degrees and sunny outside, then you need to have a standard market auto insurance policy. Just be aware that if your company writes a "stated value" policy, you expose yourself to the risks mentioned above (i.e., market value paid in event of a total loss, which could be less than you feel like it's worth.) Some companies may write a standard auto policy on an "agreed value" basis, but I haven't heard of one.

If you never plan to use your car for driving to work, then you are better served by purchasing a "classic auto" insurance policy or one of the others out there that will write the policy on an "agreed" basis. There are "classic auto" policies that restrict mileage, and others that do not. Hagerty is an example of a company that will write a "classic auto" policy with no mileage limits, as long as you're not using the car to ever drive to work.

So you have to ask yourself: Will you ever use the car for work or commuting? If the answer is yes, then you need a standard auto policy. If the answer is no, go for a classic auto policy.

These are general guidelines, everyones situation is different, Your mileage may vary, etc etc yadda yadda. Like I said, PM me if you have a specific question.

I just banged this answer out in a few min., hopefully when I have some time I will finish the article I've been working on which explores all these issues in depth.

 

Check out Farmers (ironic huh Farmer Dave!). My policy on my Lotus is a mix between classic and standard. I have an agreed value and do not use it to commute, but the policy clearly states I can use the car for ANY PURPOSE (except racing) on an occasional basis. They are "assuming" no more than 2500 miles a year but that is not an iron clad restriction. It costs a little more than Hagerty; $188 a year as opposed to $134. But that's chump change for the more liberal useage allowence.

Ken

 

Unless you have an agreed value up front, you will almost certainly end up in court to establish and obtain the true value of the car. Insurance companies are the absolute scum of the earth and, despite your car being pampered/serviced/documented/etc/etc they will point to the eBay/wholesale auction price of the crappiest first-year, high-mileage fuzzy-titled euro-spec beater available and that is all they will give you unless you get lawyers involved.

On top of that, Farmers in Colorado also required that I should accept a %10 "participation" over an above the $1K deductable. Basically an additional %10 deduction.

Oh, but the yearly cost was not bad since I have a whole suite of other policies through them.

That is why threads on insurance rates are virtually useless unless more details than premium payments are listed.

 

Check out this article at Edmunds. It's a good overview of Actual Cash Value, Stated Value, and Agreed Value insurance.

http://www.edmunds.com/advice/insurance/articles/43007/article.html

 

I agree your agent's answer has mislead you......

Stated value simply fixes the amount they pay on a total loss..while it is true this might leave some money on the table if the vehicle is INCREASING in value, observations stated above are correct, come settlement time they would otherwise DEVALUE your vehicle to NADA or wholesale $$$$ and write the check.

So your pristine 'above average' car would immediately be settled out as "twenty five year old beater"..

They use the low numbers in valuation anytime it's to their advantage...watch out for the "old car so it's OK to repair it with used parts" scam as well......they authorized a Service Center to reassemble my Ferrari with glue once............


I don't think so..........

 

I like ACV(actual cash value) of a standard policy better than stated or agreed value policies anyway. With an ACV policy, the market at the time of your loss determines the value. All you need to do is find several same model, similar condition/mileagae cars that have sold in the area in the last 60-180 days prior to your loss and provide that info to the claims adjuster. I have never had a problem getting a fair value on a total loss or getting a car repaired at a shop of my chosing...but, I do have a great Allstate agent!

 

I'm still a little confused between some of these flavors as well, but what my Liberty Mutual agent suggested was going with normal insurance, but getting appraisals now & again to support the value of the car in the event of a claim. They suggested against a stated value policy as this would need to be revisited every year for appreciation. Of course, if I totalled the car out, I know it would be an enormous hassle to get my fair money out of them, with or without a recent appraisal. I'm not sure what I'll wind up doing next spring!

 

You're absolutely right... Every state is different in its laws, and standard practices, and every company is different in the way they handle claims and do their underwriting... take into account that rates are based in large part on whether or not a particular company is actively seeking new business, or if they've got all the business the want for the moment. Only then do you start to take into account the differences between individual drivers, their driving records, past claims, discounts they qualify for by having multiple lines of business with a particular company... do I need to go on? sandersja is right, just listing the type of car and how much you pay is never enough info, to get a handle on insurance rates.

 

Oh is THAT all? GOOD LUCK for any limited production exotic! My Europa TC is one of maybe 100 left in the world that is in top condition; many Ferraris are in the same catagory, even the "common" ones. How many top condition 400i's were sold last year that one can document? How many Boxers of any flavor? I insisted on an agreed value; if my car is totaled I'll be happy with the cash they will pay me. If somehow the unwashed masses realize well sorted TC's are a $50k car in a $15k package I'll kick up the value.

Ken