Agreed Value Insurance

[mrfirepro 127 1 Cars]

Has anyone got agreed insurance values, if so do they get to the rebuild cost?

 

I decided to insure with Lancaster because they seemed to have a descent (and popular) agreed value scheme, as I was looking for someone who will cover the cost to rebuild the car to it's current levels in the event of it being stolen of written off (this is what I thought an agreed value scheme would do).

 

After filling in the various forms and sending photos I have today received a letter from Lancaster.

 

An extract from their letter...

 

"When an agreed value is proposed it is based on evidence of current market conditions taking into account the following points. We also monitor auction sales and check the sales columns of specialist publication.

 

1. How much would someone expect to pay for a vehicle in similar condition?

 

2. What would an owner expect to receive for the vehicle if it were to be offered in the various specialist publications, through an auction or via an owners club.

 

If you believe the value we are stating is too low, please help us by providing evidence to show that models such as yours are changing hands at the price you have submitted.

 

We are asked to value cars based on the purchase price of a vehicle and the cost of rebuilding it, irrespective of the market value of that vehicle. We can do this if it can be demonstrated to the insurer that the model is very rare and, more importantly, very desirable.

 

Evidence would also need to be would also need to be supplied to show that, after the car has been rebuilt and offered for sale, it would find a ready buyer at the value being requested."

 

 

 

I can understand there point but I read the above as it's an agreed value policy at "market value", nothing else........

 

So this raises the question if it's only market value, why would anyone go with Lancaster for an agreed value, further more the market value is agreed now and it's doesn't seem that there is scope within the wording I've seen for "agreed value or market value, which ever is highest" therefore someone agreeing the market value now could be paid less that the market value at the time of the claim or total loss in the future.

 

I requested the agreed value to be the value of the invoices I have for the project.

 

So before going back to Lancaster or looking for another insurer, I would be interested in hearing others experiences particularly with covering the cost to rebuild to same standard, which I believe can be clearly demonstrated by the detailed records that have been kept.

[cRaig 273 1 Cars]

I had a similar problem, many places say they do 'agreed value' insurance, but on closer inspection it is actually market value. In the end I went with Adrian Flux, who do a genuine agreed value, based on photographs of the car, and a description/evidence of the money spent restoring the car. I then had it in writing that the value was agreed (a figure significantly higher than the car is "worth" on the open market, but representative of what it would cost to get another car to the similar condition. Worth giving them a call!

[Simes 248 2 Cars]

HIC - and got agreed value on my last one.

[Henry Yorke 269 3 Cars]

Difficult one this. When I was chairman of the PSC, I often got asked to perform assessments for members for their policies as we were an MSA registered club. I remember one guy wanted me to value his 1.9 8v with a cage and Weber 40's for £30k as that is what he had spent on it in the past 5 years he reckoned. I said I couldn't and it was not worth anythere near that.

If you built a car with 100% new parts, as soon as you fit them they are second hand parts and devalue.

 

The market at the moment is for low mileage cars with original paint and provenance. We're not quite in the For The Love Of Cars territory where things are restored and get big money at auction.

 

If you manage to get a quote which covers the cost of rebuilding a car to the same spec then I guess there will be a significant premium on it, but someone woukd take it on. As Craig said, unless you get a value in writing then it is only going to be market value, and even then, you never know how good your insurance is until you need to claim. The majority of insurance covers you for damages you make to a third party, so the cost of your own recompense is pretty immaterial.

 

Good luck and let us know who will cover a car based on a folder full of receipts as opposed to the infamous "Market Value"

[Stu 18]

In my experience, you can influence the 'agreed value' with evidence of what other examples have pulled, but HIC (in my case) deem the agreed value to be that which is linked to current market; i asked the question on taking the policy out and the guy was quite cagey about it, essentially he intimated that they wouldn't cover the rebuild cost, they would take what 'I' thought the car was worth and verify it, which then sets the value.

[Anthony 1,003]

Is agreed value policies are actually just market value policies, then what's the point?

 

As I understood it, agreed value always used to be that you said the car was worth £x, you provided evidence why it was worth £x, and in the event of a total loss you received £x.

 

If you now merely get an arbitrary market value, what's the point over and above a regular non-agreed value policy? What is "market value" anyway, as there's such a wide range in 205 values at the moment that an average car of the same age/mileage/spec could be worth anywhere from say £500 to £5000, a factor of ten difference?

 

It doesn't affect me as it stands as neither of my two are worth more than what a typical 205 is being advertised at, but I certainly wouldn't want to be someone that's sunk a five-figure sum into a full nut and bolt rebuild to have an as-new car if you run the risk that it won't be viewed any differently to a typical tidy £2-3k example should the worse happen.

 

That said though, I can see Henry's point too - the car can't be worth what it cost you to rebuild if you've used and abused it since. They say that a new car loses 20% of its value when you drive it off the forecourt, and continues to depreciate like a stone for a few years, so I guess the same must logically be true for a rebuild to some degree.

[Stu 18]

I think we're using the term 'market value' literally here; the likes of 'we buy any car' or whatever would take market value at maybe £150 or some other derisory value; i think when used in relation to agreed valuation policies its more the 'proof' that the car is worth what you say it is, based on the prices similar cars are selling for 'in the market'.

[Tom Fenton 1,541]

I think that market value is the difficult thing to define. For more modern stuff its easy, they just use the Glasses guide price. But older stuff like our 205's are no longer in it. So what is "market value"? Hopefully this is where the agreed value could be useful.

[jackherer 543]

That said though, I can see Henry's point too - the car can't be worth what it cost you to rebuild if you've used and abused it since. They say that a new car loses 20% of its value when you drive it off the forecourt, and continues to depreciate like a stone for a few years, so I guess the same must logically be true for a rebuild to some degree.

 

When you insure a brand new car the policy usually states that if it is written off in the first year they will replace it with another new car. I don't see why Paul shouldn't be able to buy a similar policy for his car which is effectively brand new if he has the receipts to prove it.

[AlexRS2782 136 1 Cars]

Difficult one this. When I was chairman of the PSC, I often got asked to perform assessments for members for their policies as we were an MSA registered club. I remember one guy wanted me to value his 1.9 8v with a cage and Weber 40's for £30k as that is what he had spent on it in the past 5 years he reckoned. I said I couldn't and it was not worth anythere near that.

If you built a car with 100% new parts, as soon as you fit them they are second hand parts and devalue.

 

The market at the moment is for low mileage cars with original paint and provenance. We're not quite in the For The Love Of Cars territory where things are restored and get big money at auction.

There's a lot of that going on in the Ford RS scene at the moment as well. Quite a few people trying to influence the relevant model Registrar on the RSOC by saying "xxx car just sold for xxx, therefore my car is worth the same or more", and then get rather unhappy when the Registrar disagrees and refuses to value it to that level.

 

The problem seems to be that because 1 or 2 cars with genuinely low mileage, all paperwork, etc, sell from private collections for big £££, that everyone else instantly thinks their car is also worth something similar, even if their car has massive mileage, lack of known history, etc.

 

I've spent masses of £££ on my Mk1 Focus RS since I first bought it in 2006, but even I know that there's no way I'd get an insurer to agree to payout what I spent on it during that time. That however doesn't stop some owners thinking their car is worth £25k based on how much they've spent on modifications, etc. In reality the insurer would probably only pay circa £10-£12k for a genuine / well looked after example, and probably closer to £5.5-7.5k for a high miler in average condition based on the market value.

Edited May 15, 2015 by AlexRS2782

[Simes 248 2 Cars]

When my 205 was written off I got the agreed value (4k) for it.

[mrfirepro 127 1 Cars]

Thanks for all the comments, I'm going to try some of the companies mentioned.

 

My problem is that having now completed the build having renewed, rebuilt or refurbed every single item on the car, I find that my understanding of an agreed value policy was wrong and that potentially I can't even insure the car, in the event of it being stolen or written off for more than a third of the parts cost to repeat the build.

 

I'll update if I get any further with a new insurer

[omega 82]

another thing to watch for is modifications you declare the mods but in the small print of the policy they say they only replace with standard parts.

[Andy_C 50]

Paul I've replied to your pm. I should be able to help as I deal extensively with restorers whereby the "value" of the car is donor + parts + labour = insured value.

[SkyQuake 70 1 Cars]

When I insured with Neal at Greenlight, I asked for an agreed value of £4000. This is what I believed I should be able to sell the car for following its refurb, rather than the cost of rebuilding it following a substantial accident (which could be significantly more.)

 

They requested photographs from several angles so that they could verify the condition and make sure my stated value was reasonable. Shortly after providing the photographs, my value was accepted and written into my policy. Quick, easy and painless. In the event of my vehicle being declared a total loss, greenlight pay me the agreed value. The market value would be significantly less.

[rikky 37]

As above, I've recently had this conversation with Greenlight too.

 

If I deem it worth X and so do they, it'll be insured for X. If it's a total loss, I'll get X (minus my excess)

 

Simples

Edited May 20, 2015 by rikky

[Henry Yorke 269 3 Cars]

That said though, I can see Henry's point too - the car can't be worth what it cost you to rebuild if you've used and abused it since. They say that a new car loses 20% of its value when you drive it off the forecourt, and continues to depreciate like a stone for a few years, so I guess the same must logically be true for a rebuild to some degree.

 

To pick up on Anthonys point, what you are looking for is a sort of Gap Insurance I guess so you are not out of pocket in case it is a loss.

 

Please let us know the outcome of your findings Paul as 205's are getting a wide spectrum of values, with everyone thinking Dimmas are worth £20k and 1FMs haven't really got a market figure as they don't come up for sale and are all in totally different conditions / completeness.

 

Andy, Have you anything you are in a position to "share with the group"?!!!!

[Andy_C 50]

I'll sort Paul first and see what happens. I've spoken to one insurer already who will listen and

I hope be sensible. I'm away on business now until the middle of next week but have left it in the hands of a very capable colleague.

 

Paul's car is somewhat unique as I can't think of another restored to this extent. Proper classic car underwriting doesn't de-value a newly restored car as soon as it's finished. It tends to focus instead on the cost to reinstate - and being returned to the same financial position as you were in immediately prior to the loss is a fundamental factor of insurance.

Edited May 20, 2015 by Andy_C

[Telf 224 2 Cars]

I used Adrian Flux- many pictures provided and an agreed value of £3000 at the moment.

[ScoobyJawa 23]

The market at the moment is for low mileage cars with original paint and provenance. We're not quite in the For The Love Of Cars territory where things are restored and get big money at auction.

 

Thanks for this, interesting reading. Mines on 79k which is pretty low mileage, not as low as some of the 40k ones but they are rocking horse sh!t and most others are well over 100k. I was umming and ahhing to respray as theres a few marks on the paint, but now it will stay as is with the original paint. I think I'll just get a detailer in to work as much magic and protection on the existing paint as poss.

[dcc 855]

I was told by greenlight they will only value a car over 2500 if you have an alarm fitted

[rikky 37]

Just get a Thatcham Cat2 off ebay for about £40-50 with the keyfob. I had to do that with my caged track car before anyone would touch it because of the spec.

 

I'll be doing the same with my 205 GTi6 - well mentioned as I'd forgot! Best buy one now off ebay.

 

Edit > Just bought one of these - clicky - think that was the same one I had in my other car. Easy to fit

Edited May 22, 2015 by rikky

[Weser 30]

I have just moved my vw camper insurance from flux to RH. I had a agreed value with flux and was very easy to sort out as said. However the level of cover and bonuses with RH is really good. They are really easy to deal with as well at the moment. Breakdown cover in the UK and Europe. They have had great reviews on the camper scene. I'm just going through the agreed value part with them at the moment. All I have had to do is get a written valuation and email it off to them - even easier than flux. I had to get flux to up what they were offering as it wasn't enough.

 

Not sure if RH will insure a 205 might be worth ago.

[lagonda 42]

In my previous life, I was the underwriter of vintage and classic car schemes for a major insurer.

 

That was 20 years ago (gulp), but unless things have changed, or you find an insurer that doesn't know what he's offering, agreed value does indeed mean market value.....which means what your car would be likely to sell for, given its history and condition. A restored car is NOT going to sell for what the car cost originally plus the cost of restoration. I've spent £50,000 + having my Riley restored...but I know no-one will give me £50k for it! The restorer reckons £25k, and frankly I'll be surprised if the insurers accept that. Insurance is indeed meant to put you in the position you were before the loss....but that position will not have been a car worth cost plus restoration cost, but what the collected car market would bear for it (not to be confused with Glass's Guide values as used for moderns).

 

The idea is....you get the money, and go out and buy a similarly restored identical model car. Simples! You won't be paying that guy the cost of that car plus the cost of his restoration, will you?!

[Andy_C 50]

With the rising values of 205s the sort of money a home enthusiast is likely to spend isn't far from the kind of money a 100 point car could fetch.

 

Of course if you'd paid a restorer labour plus profit on parts it's unlikely you'd be able to insure at that cost but there are insurers out there who'll offer reinstatement cover.

 

In reality all agreed value is is an assurance of a figure which will get paid but in the current climate values are changing at least quarterly on a lot of cars.

 

If in doubt visit a good classic car dealer and ask them to value your car - that at least gives you a sale figure.

 

Original low mileage cars are selling for upwards of £15,000 so that has to put what is effectively a zero mileage example well north of that.

Edited May 24, 2015 by Andy_C