Motoring Discussion > Insurance premium versus current value of car Tax / Insurance / Warranties
Thread Author: L'escargot Replies: 7
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New Thu 7 Jul 11 09:46 
 Insurance premium versus current value of car - L'escargot
Are insurance premiums related to the current value of the car? Do insurance companies automatically allow for depreciation or is it up to the owner to try to get their insurer to take it into account?
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New Thu 7 Jul 11 09:54 
 Insurance premium versus current value of car - idle_chatterer
I think that premiums are related to the repair cost of your car not it's absolute value - so ease of repair and cost of parts is a factor.

Then there's the likelihood / ease of theft.

Then there's the driver - age, profession, statistical probability of having a claim and likely size of that claim.

Put is all together and add a profit margin and you have a premium, I don't think that the write-off cost is the biggest factor in all this.

I remember a few years back my young nephew wanting to insure a Series III Land Rover, it had a low value, was slow and I guess they don't get stolen that often. When asked why the premium was so high the answer was "it may be worthless but you can do an awful lot of damage (to other cars and property) with one of those things".....
Last edited by: idle_chatterer on Thu 7 Jul 11 at 09:54
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New Thu 7 Jul 11 09:57 
 Insurance premium versus current value of car - spamcan61
I'd say the value of the car plays little part, the big risk from their perspective is an accident involving a multi-million payout, and the value of the car is trivial compared to that.
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New Thu 7 Jul 11 10:01 
 Insurance premium versus current value of car - WillDeBeest
They say they do. The value of my car has fallen from about £11,000 to more like £2,000 in the seven years I've been insuring it, and when I've renewed with the same insurer I've asked if I need to adjust the value for depreciation. The answer each time was no, that's done automatically.

In practice, for most ordinary vehicles I don't suppose it makes much difference to the premium, since the replacement cost of the car is tiny by comparison with the potential liability for deaths or injuries caused by the driver.
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New Thu 7 Jul 11 10:06 
 Insurance premium versus current value of car - Zero
Under about 30k the value of the car pays little part in the cost of the quote,

Type of car, repair costs (every new car is torn down to see how much it costs to replace parts - manufacturers now take insurance input into designing cars) post code and driver profile are what matters.

There is very little difference in a 3rd party / fully comp quote for my car.
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New Thu 7 Jul 11 10:25 
 Insurance premium versus current value of car - henry k
>>The value of my car has fallen from about £11,000 to more like £2,000 in the seven years I've been insuring it,
>>
At renewal time, just out of interest, I tried one of the compare sites.
Inputting my vehicle registration triggered a book value that was even less than I had expected. It confirms I am in the bangernomics zone.
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New Thu 7 Jul 11 10:29 
 Insurance premium versus current value of car - Zero
Are you still driving round in that heap H? you are devaluing the whole district.
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New Thu 7 Jul 11 21:20 
 Insurance premium versus current value of car - Lygonos
spamcan hits the proverbial nail - the biggest factor involved in working out the premium is the likelihood of substantial personal injury claim, and hire costs for a 3rd party.

The repair costs of your own car are small beer compared to this.

I've seen anecdotes where TPFT cover is more expensive than Comprehensive for the same driver/vehicle as the insurer sees someone paying for TPFT as being a higher risk driver.
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