When comprehensively insuring your car, you’re generally given 2 choices: insuring it at ‘retail value’ or ‘market value’. However, now you’ve got a third alternative: insuring your car for an ‘agreed value’. But what do these options really mean? Wynand van Vuuren, client experience partner at King Price Insurance, breaks things down.
The retail value is essentially the cost to replace your current car… The amount it’d cost you to buy the same car from a dealer, considering its age, condition and mileage. The retail value is typically higher than the market value, which is the price you could sell your car for at any given moment.
Both retail and market values will depreciate over time, aligning with your car’s value. That means if your car’s stolen and not recovered, or written-off, the insurance pay-out might not cover the cost of a brand-new equivalent.
On the other hand, insuring your car for an agreed value does exactly what the name implies: You’re covered for a set amount agreed upon by you and your insurer for a specified period. So, if your car is written-off or stolen, you’ll know exactly what your pay-out will be. And, with King Price Insurance, this agreed value can be up to 20% more than the retail value, for 3 years.
‘Agreed value insurance has traditionally been kept for classic and rare cars, which could be tough to replace in the open market,’ says Van Vuuren. ‘But it’s now also an option for car owners who crave the certainty of knowing how much they’ll receive if disaster strikes.’
Insurance premiums for agreed value policies tend to be higher, as the agreed value is usually more than if your car was insured for its retail value.
So, which is better? According to Van Vuuren, there’s no 1-size-fits-all answer.
‘Deciding on the best car insurance cover for you means comparing like-for-like, comprehensive cover with comprehensive cover. But when deciding between retail and agreed value, it depends on your personal circumstances. How much do you value your car compared to the market? How much can you afford for your monthly premium? Insuring your car for its retail value means a lower premium, but also a lower pay-out. Agreed value means higher premiums, but 100% certainty when it comes to your settlement. The crucial thing is that you have options,’ he concludes.
You can check out King Price’s agreed value insurance cover by clicking here. You can click here or WhatsApp us on 0860 50 50 50 to get a commitment-free quote for comprehensive and agreed value car insurance.
