_Charles_

What is Agreed Value Coverage, and Why You Should Care

There are typically four methods used to decide what you get paid if your auto is a total loss. Each is different, and protects you to a different degree. Only one guarantees you get what you expect, or even what you pay for.

If you're in doubt as to what you have now, don't take anybody's word for what is included in your coverage. Read the policy language yourself, and ask your agent for written clarification if you have any doubts or questions.

#1 Agreed Amount (or Agreed Value)
The most desirable for car collectors. It leaves no doubt as to what will be paid in the event of a loss. With Agreed Amount coverage, the amount you see on the policy is what you'll get if the car is written off as a total loss. Period.

How Do I Set My Agreed Value?

Get a professional appraisal.

The purpose of an Agreed Value is to match the actual market value of the auto as closely as possible. It is not meant to cover any extra intrinsic value you may place on the car for personal reasons. We have a pretty good idea as to the appropriate value of most autos, given their mileage, condition, history, custom modifications etc.


#2 Actual Cash Value (ACV)
Typically provided by standard auto insurance policies. The insurance company decides what you get paid at the time of the loss. While you may have some input if you don't agree with them, the final decision is theirs. It will be based at least in part on using sources which you may not agree with. If you refuse to settle for what they want to pay you, you may need to resort to legal action to arbitrate the issue. We can help if you are already in a dispute, this service can be very expensive.

#3 Stated Amount (or Stated Value)
Often provided on collector and limited use policies. The policy language typically states the insurance company will pay "the Stated Amount, or the Actual Cash Value, or the cost to repair not to exceed the Stated Amount whichever is less.".

Guess what: The Stated Amount is just used to determine your premium cost: The higher your Stated Amount, the higher your insurance premium. The contract language permits them to pay what they decide the Actual Cash Value of the auto is. They are under no contractual obligation whatsoever to pay the Stated Amount. Surprise!

#4 Replacement Value
This covers your vehicle up to the cost to actually REPLACE the vehicle with a like or similar vehicle. This used to be common practice among standard insurance companies, but has been discontinued by almost all carriers.

Unsure what you have?

1. Read your policy . If you don't have all of the forms (the policy and all endorsements) then request a complete policy.

2. Get in touch with an underwriter from your insurance company. Don't take advice from your agent on this subject.

3. Ask the underwriter for a valuation guarantee in writing, on company letterhead.

4. Have the underwriter direct you to the language that spells out the valuation . If you don't get anything but straight answers, look for another insurance company.

What about my mods? Aren't they covered?
Typically, NO. If you add a modification to your vehicle on a "standard policy" (not an agreed value policy), you MUST submit the reciepts to your insurance agent so that they can add an endorsement for the new item. Expect your rates to go up with each endorsement that you add, but not that much.

Won't my insurance company cancel me if they know what I am doing to my car? (or I add a performance item?)
Yes and No. Most insurance companies write "Standard" policies. These policies are for the masses, not for automotive enthusiasts. Places like Allstate, Progressive, State Farm, Geico, etc, DO NOT offer policies that will fit you. They MAY offer you a few endorsments, but beyond that, your car doesn't fall within the scope of their policies. They're not canceling you becuase you modified yor car, but rather becuase your car no longer falls within the limits of the policy (there is a difference).

My agent "says" I am covered, am I really?
Probably NOT. Read your policy, over and over. Most agents have no clue what they even offer, TRUST ME, I KNOW. If in doubt, contact the State of Florida Department of Insurance, it's free, and they will explain or clarify.

RiceRocket, Are you an Agent? Or how did you learn all this?
I am not an Insurance agent (not yet....still pondering whether or not to get my license). I learned all this from experience. I had my car stolen back in 2001. The car was modified, and I had even shown it to my insurance agent many times. I was covered by Nationwide Insurance. After contacting my claims adjuster, I was hit by shock. They wern't going to cover my mods. I began fighting the insurance company. It became a 7 month ordeal. I read the laws, my policy, and even got assistance from the FL DOI office. In the end, I proved my point, and settled the claim @ an agreeable amount. In the mean-time, I became very verse in the workings of claims adjusters, insurance companies, Insurance policies and laws.

So RiceRocket, what do you reccomend?
Do you love your car? Do you have alot of money in it? You need to secure it! I currently can not reccomend an agency, as I have not had to deal with this since the loss of my civic, but they're are some out there. Don't wait till you've been in an accident or the car has been stolen to find out that you are not covered. It can be the worst day of your life.

This Public Annoucement brought to you by:
Charles

JJFreshyZC

Good info.. shamless plug..

sportcompactvalue.com

_Charles_

TTT

97blkz

I am licensed and this is good info! Always consult YOUR agent with questions, we are in a sense responsible for your policy!

_Charles_

hmmmm....consult your agent if you are unsure, but ultimately, if it's not in writing, it's not covered. I have extensive first hand experience with an E&O claim, and it isn't pretty.

_Charles_

Just a reminder.... TTT

Chuck 98 RT/10

Any thoughts on diminished value?

_Charles_

I didn't get into Dimished value becuase it is a touchy subject, but worth the fight if it is not excluded in your policy. Also, Sales Tax reimbursement is recoverable in a total loss as well. There is so much to insurance claims, we could talk all day on different issues.

Charles