Accurate Auto Appraisers
Insurance Coverage Choices
If you have a unique or custom vehicle with a value that is worth more than the average car, you most likely will be challenged by your auto insurance carrier with a total loss insurance claim, especially if you are not prepared with an accurate fair market value auto appraisal.
The insurance claims procedure for determining the value of your car relative to a total loss settlement relies upon a computer formula based on advertisements for comparable values of alleged similar cars. This computer formula is accurate for a claim on average vehicles.
However, the one size fits all computer formula used to make required adjustments for differences in like-kind type and similar quality does not translate well with significant valuation differences for custom, exotic or rare vehicles.
Insurance claim departments do not have the ability or willingness to adjust fairly for unique differences of significant value. The insured is left with a difficult process for any successful challenge to their low value claim settlement offer.
The exception is when your vehicle is covered by an agreed upon, Stated Value policy that will likely require an appraisal from a recognized expert. Having an insurance company accept and acknowledge receipt of your appraisal is a sound strategy, even if the appraisal is not required for your Stated Value policy coverage. Your appraisal would become the main evidence in any future dispute resolution process.
The appraisal cost is a business value decision by the insured party and should be considered a factor and a part of your insurance coverage cost. Like all auto insurance policy coverage decisions, the obvious goal is to pay the policy premiums and never need to collect on a claim.
Stated Value Coverage is not the same in all insurance policies. Each policy has its own specific limits and restrictions, with the main issue is whether the accepted stated value of the insured vehicle is “guaranteed”.
When the stated value is guaranteed, it’s like purchasing life insurance. The policy premium reflects the amount of coverage, and frankly the insurance companies’ position is why care if the policy coverage is generous when there is no potential for a fraudulent claim. Your life insurance carrier does not care if you die as your demise is built into the cost of the policy premium.
In an automobile insurance policy, it is expected that the cost of claim will be higher on a more valuable vehicle. The cost of the premium is calculated by experts to reflect that value factor, along with other variables.
The bottom line is that you are not cheating an insurance carrier if you insure your vehicle for what it is worth to you (Stated Value) as long as the value of your vehicle is reasonably supported by evidence in an appraisal from a recognized expert. The appraisal is a legitimate valuation benchmark that supports your best interest in the event there is future loss claim instead of the opinion of the insurance company claim adjustor.
The purpose of having adequate insurance coverage is to be made whole in the event of a loss.
If your vehicle is damaged by another party who was at fault and it is repaired, you may be entitled to compensation for the lost value of your vehicle, because regardless of how well your vehicle is repaired, it might not be returned to the condition as it was when manufactured. Insurance law refers to this scenario as diminished or lost value.