Do we really need agreed value insurance???

Eric's accident and loss got me think about agreed value policies vs ordinary ACV policies again. The argument against ACV policies is that the insurance companies will lowball the value of your car. However, having had policies with numerous different insurance companies and having suffered a total loss of my own a couple of years ago I know that all my policies have a section regarding evaluation in case of a total loss which states that if I don't feel the insurance companies offer is acceptable I can have my car appraised and submit the appraisal before an independent arbitration board. I also know that, at lest in my state, the means of determining ACV are well defined by the state so as to avoid disagreement between insurance companies which could result in flooding the courts with litigation between companies. I also know that in my state the difference between what I currently pay for an ACV police and an agreed value policy runs between $750 and $1500/yr, depending on the insurer (Hagerty being at the high end). That all sound fine, but it doesn't give you a feel for what the ACV of a totaled Ferrari is. In Eric's case I know he had an agreed value policy. I will assume that it was for between $90 and $100k which seems reasonable in today's market. Of course, as noted, the premium for an agreed value policy can be substantially high then an AVC policy. In my case I pay $253/year for my 355 and $261/year for my 308. Granted, I store my cars winters with only comp coverage, but I have the max liability coverage available. All the agreed value policies I have researched do not allow partial while the car is in storage coverage.

Anyway, I started looking at a number of salvage auction site which also provide the ACV of the cars listed. Here is what I found

05 F430B 28k miles ACV $115k
98 355B 11k miles ACV $93k
10 458I 21k miles ACV $188k
12 458 5k miles ACV $249k
98 355s 38k miles ACV $68k
04 360s ACV $107k
04 360s 37k miles ACV $77k
06 430B 33k miles ACV $128k
99 360b ACV $72k

These number seem to be consistent with today's real market values given consideration of mileage and condition.

There are certainly arguments that support agreed value policies, like peace of mind should the worst happen. But for the average car it doesn't seem that the idea of being lowballed by the insurance company holds up. Obviously, we each make our own decisions about what type of insurance to carry. I'm comfortable with AVC coverage. Even NADA list the high value of my 355 as $82k, average retail as $58k. If I got 1/2 way in between, $70k, if the car was totaled, plus the $3k minimum saved in premiums I'd be satisfied.

 

Hi Dave,

I know we discussed this on the phone and we both have Geico but pay very different rates. Things differ by state. Geico also put me in touch with AM for my Ferraris incase I wanted agreed value and when I talked to them the rates were about $1000 to $1200/year for each of my Ferraris (over $2k total). That was last October. As I recall that was for $100k on the 308 and $80k on the 355. They had no problem with either. Change from CT to PA and the rates dropped by about 50%. Asked why. They said stated insurance laws differ. Also, I don't know about NY, but in CT all insurances companies have to determine the ACV in the same manner, as I said above. It's not straight NADA or KBB. It's for a similar car with similar mileage, options and condition. Now, not a Ferrari, but when my 96 BMW 328is was totaled I looked at NADA. High values at that time was around $4k (it's actually higher now). Looking at Autotrader, Cars.com, etc cars were listed for under $2k to mid $3k range. And the E36 328is is a pretty rare car. (There are tons more E36 M3s around.) None were very good where as my car was very clean and had only 88k miles on it. I received over $6k for the car. That was the value my insurance company appraised the car at and with the other, at fault driver's insurance agreed to pay without any argument.

But check your policy for the paragraph on evaluation and arbitration. Assuming a standard policy, look under Section III, Conditions, Paragraph 6. Appraisal. It would be interesting and of value to see if NY has the same rights of appraisal as CT if you disagree in the amount of the loss.

I understand your concern with $47/hr. But does going with an agreed value policy change that?

There is no doubt that insurance varies state by state. It's really important that people understand their policies and rights under them. Still, based on the cars I looked at here I don't see listed ACV for any of them being way out of line with the market. And they obviously aren't all insured by the same company or located in the same state.

 

No. When I asked for 100k on my 95 spider they said it would need an appraisal. They were fine with 80k. No problem with 100k on the 308 through. They have limits.

 

That's part of the argument. If you have AVC or replacement value insurance and the car appreciates, your covered automatically. With agreed value, you have to stay on top of it. Another point is that is you have a car valued at AVC and insure it with an agreed value for AVC, you get ACV. But if you have an ACV policy the pay out is what it takes to make you whole again. So if the car is worth ACV you get ACV plus the sales tax on ACV plus registration. At least, from experience, that is how it works in CT.