When you write off your vehicle there is a popular misconception that you will get paid what you Insured the vehicle for or what we call the 'Sum Insured' which is shown on your policy schedule.
The settlement is actually based on the actual market value of your car at the time you have the accident. The 'market value' means the 'second-hand' value or what the car would have been worth if you had traded it in or sold it on trade-me for example.
The key things that are considered by your insurance company when determining the 'market value' of your vehicle are:
- age of the vehicle
- mileage on the clock
- general condition of the vehicle e.g. panel work, tyres, motor etc.
- W.O.F & Registration history
The value of the pay out will be determined by a licenced motor vehicle valuer actually sighting the vehicle to determine what it would have been worth on the current market if you had sold it just before you had the accident.
This does not always mean that you will receive the full amount you insured the vehicle for so it’s important to review this annually with your broker to make sure you are not paying too much premium.
On the other side of the coin you need to make sure your 'Sum Insured' is not too low as this is the maximum amount you will get paid out in the event of a total loss claim.
To obtain the right value you can consult your local car dealer or there are a number of websites available such as www.redbook.co.nz & www.aa.co.nz which can give you an estimated market value for a small fee.
As you can see its important to get the value you insure your vehicle for close to its actual value. In the event you do have a serious accident or if your vehicle is stolen it’s the best way to avoid any nasty surprises at claim time.
By Chantal Tarr, previously Claims Manager.
About the AuthorName: Rothbury
Like many of our business insurance clients we're a majority NZ owned company that was started by enterprising Kiwis in 1950. Today, New Zealand is a different place to when we first started. As a consequence, the way…
Like many of our business insurance clients we're a majority NZ owned company that was started by enterprising Kiwis in 1950. Today, New Zealand is a different place to when we first started. As a consequence, the way we respond to your business and personal protection needs has evolved and matured.
While our core business is still related to creating the best insurance solutions for you, our motivation and passion now lie in being unconditional advocates for our diverse range of clients. In other words people like you.Close