Driving Insurance Company

Car insurance values is a term that is used to refer to the different values that you may insure your car for. While it is very important to shop around for the insurance company that gives you the best possible rates, it is just as important to make sure that your car is insured at the correct value. Over or under insuring your car can end up costing you a large amount of money unnecessarily.

Car Insurance Values – Market, Retail And Trade

Most insurance companies will insure your car at market value. Retail value is what you bought the car for and trade value would be what a dealer would give you for the car should you trade it or sell it to them. Market value is a comfortable average between these two.

If you under insure the car then this means that you are insuring the vehicle for less than what it is actually worth. For example, a car that is in fact worth R150 000 would be inured for R130 000. While this may result in lower premiums, it can end up costing you a lot more money when you need to make a claim. If you need to replace the vehicle you would only be paid R130 000 and if you make a claim for repairs for example, you would only receive a percentage of the money requested.

If you over insure a car then it means that you are insuring the car for more than what it is actually worth. For example, a car that is worth R150 000 would be insured for R170 000. This will result in higher monthly premiums and the insurance company will still only pay you for the value of the vehicle, i.e. R150 000, in the event of a claim. This means that you would have been paying a higher premium for no reason as all as you would not receive that extra R20 000 that you over insured your vehicle for if it is written off or stolen.