Replacement Value Insurance

[AgentTripleX]

Can someone please explain this to me? I just spoke with my insurance company to get it and the outsourced person on the phone confused me.

He basically said that it is only for cars that are less than a year old and less than 15,000 miles. They only pay the difference between the actual car value and price it costs to get a new one if you total it. I asked him twice to clarify, because I'm sure they cover the car as well. A total is a total, not just the difference. He also made it seem like you have to have a loan or lease on the car, well I bought my car outright.

What I want to know is does my 2005 Elise with 17k miles on it that I own free and clear qualify for replacement value insurance at any company?

Thanks.

[azskycop]

I just checked into that type of insurance. It was a bit more expensive than a regular policy but the only catch is the policy would only be for "special use" ie very limited miles, never parked out of sight etc.

I just stuck with my regular policy and will hope for the best.

[AgentTripleX]

The reason I found out about this is one of my clients had totaled his 06 Elise and his insurance company called me to spec out a current year (07) Elise identical to his so they could write him a check in that amount. It got me thinking. So here I am searching for answers from fellow Elise owners. I might have to call his insurance company and ask them.

[MidasHands]

I think about this all the time too. Please let us know what you find out.

[cory1000]

I was at the body shop today checking in on my car, they had an 05 elise that was there and they said it was totaled. Again, an 05 with 12k miles on it and the insurance company cut a check for 43k (exactly what he paid new for the car in 05).... I couldnt figure that out at all..They said that they couldnt determin the used value of the car because there wasnt enough date on it, so then had to cover what is was new 2 years ago...

[InfamousX]

What your referring to is GAP insurance. If you total your car, most insurance companies only pay off the depreciated value of the car. GAP insurance covers the rest. Its fairly inexpensive, about 500-1000 depending on the car. It has to be purchased at the time that you purchase the car. I have this for all my cars.

[John4378]

For reference, I paid $180 for Gap insurance for my 06 Elise through USAA.

[drivendriver]

Originally Posted by InfamousX

What your referring to is GAP insurance. If you total your car, most insurance companies only pay off the depreciated value of the car. GAP insurance covers the rest. Its fairly inexpensive, about 500-1000 depending on the car. It has to be purchased at the time that you purchase the car. I have this for all my cars.

Doesn't gap insurance only cover negative equity on the car?

If you owe more than the damaged car is worth, gap insurance will cover the difference. For example, if the car gets totaled when you still owe 40k, you don't have to pay anything to the finance company.

[MidasHands]

Thats the way I understand GAP insurance works as well. That doesn't apply when you have paid for your car in full.

[Icedog_16]

Sorinne, you should know I have the answer.

Some companies will replace a new vehicle if it is totaled within the first couple of years of the date it was purchased, the time during which this provision applies depends on the company. What happened with your client is exactly that. He had an 06 and totaled it within the first year, thus he got an 07 to replace it. The same thing goes for a couple of boat insurers.

What it appears some people are getting confused here is that of an agreed value policy. In that instance, both you and the company 'agree' that the vehicle is worth 'X' amount. In the event of a total loss, the policy limit upon which was agreed will be paid out with no deduction for depreciation as opposed to a standard auto policy where the loss settlement is actual cash value.

And for the record, gap insurance works how drivendriver said it does. It exists to protect you against a total loss where you owe more than the vehicle is worth.

[SuperVixen]

Originally Posted by Icedog_16

Sorinne, you should know I have the answer.

Some companies will replace a new vehicle if it is totaled within the first couple of years of the date it was purchased, the time during which this provision applies depends on the company. What happened with your client is exactly that. He had an 06 and totaled it within the first year, thus he got an 07 to replace it. The same thing goes for a couple of boat insurers.

What it appears some people are getting confused here is that of an agreed value policy. In that instance, both you and the company 'agree' that the vehicle is worth 'X' amount. In the event of a total loss, the policy limit upon which was agreed will be paid out with no deduction for depreciation as opposed to a standard auto policy where the loss settlement is actual cash value.

And for the record, gap insurance works how drivendriver said it does. It exists to protect you against a total loss where you owe more than the vehicle is worth.

So Kris... can I get replacement value insurance today or not?

[Icedog_16]

Originally Posted by SuperVixen

So Kris... can I get replacement value insurance today or not?

Do I know you? What did you do with Sorinne? I don't think you can. Neither can I for that matter. Best case would be getting an agreed value policy, which is generally found on an exotic auto policy. And that means you'd have to have another car less than 20-years-old and in good condition as a daily driver.

I just checked Safeco's manual (they have similar new car replacement coverage available) and it states that coverage is only available within the first 365 days. The reason I think that you probably won't find this coverage for anything other than a new car is that it introduces the peril of moral hazard. In other words, if your car is totaled or stolen and you'd get a new car, what would stop you from totalling it or having it stolen in order to get a new car?

I hate to be the bearer of bad news, but that's just the way it is. FWIW, even if you had gotten it when your car was new, the first renewal after your car was a year old would have deleted the coverage.

[nockpoint]

If the amount covered by your insurance company is only equal to your vehicles current depreciated value... shouldn't the price for said insurance go down accordingly? I've always wondered this with my last vehicle. Every year they would list the cars value in the policy the same as the day I bought it. Would have been crappy had I totaled it and only recouped a portion of that since they seemed to be basing payments on the original value.

[def]

^^ Yes I have thought about this too nockpoint, I think thats just how they can charge us more while we can do nothing about it

[nockpoint]

I suppose we could switch policies yearly. PITA though.

[mikelr]

I have a similar policy through Progressive on my 5th wheel RV. The policy states full replacement value for the first 3 years, if the thing burns up or gets totaled/stolen what ever, they buy me a brand new (equal) model.
Unfortunatly I could't find my matches and the three years are up.

[Lotus F1]

Originally Posted by SuperVixen

So Kris... can I get replacement value insurance today or not?

Yes It is what i have.

[Icedog_16]

Originally Posted by nockpoint

If the amount covered by your insurance company is only equal to your vehicles current depreciated value... shouldn't the price for said insurance go down accordingly? I've always wondered this with my last vehicle. Every year they would list the cars value in the policy the same as the day I bought it. Would have been crappy had I totaled it and only recouped a portion of that since they seemed to be basing payments on the original value.

Decrease your stated amount to reflect ACV. Problem solved.

Originally Posted by def

^^ Yes I have thought about this too nockpoint, I think thats just how they can charge us more while we can do nothing about it

Nothing nefarious on the insurer's part. The onus is on you to tell them what your car is worth since there they have no rating symbol for your vehicle.

[Icedog_16]

Originally Posted by Lotus F1

Yes It is what i have.

Are you on an exotic/collector's policy and have a daily driver? I'd hazard to guess that you do. She does not and that is why she has that issue.

[Lotus F1]

Originally Posted by Icedog_16

Are you on an exotic/collector's policy and have a daily driver? I'd hazard to guess that you do. She does not and that is why she has that issue.

Yes you are correct.