Agreed Value Classic Car Insurance
THE INSURANCE CORNER
Agreed Value by Peter James
Historically, the need for the value enhancement of Motor Insurance Policies became apparent towards the end of the 1960s when the growing interest in Classic Cars and Specialist Vehicles led to older vehicle values beginning to increase substantially as opposed to decreasing. Up to that time, insurer settlements decreased as vehicles became older but this was clearly not a satisfactory position for the owners of pristine classic vehicles which had acquired a collectorâs value way above their as new cost.
Since Insurance Companies are traditionally somewhat less inclined to innovate than other financial institutions, it took a trip to the High Court by the aggrieved owner of an MGTA who had been offered peanuts following a loss before insurers looked seriously at the position. Interesting how little things have changed during the intervening years!
So Agreed Value cover began to be provided and over the years, systems were put in place to ensure that the client received correct loss settlements whilst protecting the insurer from paying out for deliberate over-valuation of vehicles.
We are now seeing, however, a change of approach on the part of certain insurers which has the potential to diminish the Agreed Value extension so it is vitally important to take care when arranging cover. The following are the key areas:
1. Always ensure that once an Agreed Value figure is accepted by an insurer, it can only be put aside in the event of a situation where the entire policy could be voided. For example, this would occur if evidence of fraud emerged during investigation of a loss.
2. Do not accept an Agreed Value provision that allows the sum to be paid by an insurer to be reduced or amended by an assessment of the immediate pre-accident condition.
3. The inclusion of the alteration detailed under number 2 often goes with an extension of the period required between valuations as from the historic two years to four years. It is sold as a client benefit but can prejudice settlement in the event of a claim.
4. When setting up the policy, always obtain a Club valuation if one is available. This brings the weight and authority of the Club to your relationship with the insurer.
5. Re-value with the Club every two years. This will ensure that full Agreed Value protection will continue.
All Clubs operate on behalf of their members and the provision, if possible of a valuation service is an outstanding example of membership benefit
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