We all know insurance is a very important aspect for any car owner, without insurance, you would be vulnerable to a lot of losses and would have to bear risks alone. Despite the fact that insurance is very important and you might even have you’re your car insured, the big question is, do you have the accurate insurance coverage, or is that insurance coverage the best suited for your kind of lifestyle? We will be trying to explain a type of insurance coverage which is the stated value car insurance. Don’t just jump into any insurance plan, look before you leap and understand what you’re jumping into and its benefits.
What is the meaning of a stated value car insurance?
Stated value insurance is the type of insurance coverage where you tell your insurer how much your car is worth. With this type of coverage, you will be able to determine the value of your car as you state it (in a document) the downside to this coverage is that the insurance company can either choose to pay you the stated value or the actual value, whichever is less.
When you see a type of coverage like this, you should understand that it is common with classic cars and in the bid to try to value the car, the stated valuation method is adopted. Even though you have the power to decide the amount your car is worth and clearly state it, it could be both a good and bad position. On the bright side in the sense that you will have to pay higher premiums if you state the value of your car to be high, but eventually when you lay a claim, you will be paid the stated value. if you claim that your car is far less than its worth, you will pay lesser premiums but you stand at loss to be paid the actual value stated or the actual amount, whichever is less.
You can think of it in two ways, one is the overestimation you place on the car, paying high premiums, and gaining the actual value of the car in a case of a total loss claim and the other is underestimating the car, paying lower premiums and losing the actual value. The alternative to this type of coverage is called the Agreed value, where you and your insurer agree on the worth or value of your car based on a number of factors. Most people prefer this type of coverage, but whatever your choice is, we have you covered.
The most important thing about this type of insurance that you need to pay attention to is the fact that any decision made will be by mutual agreement, you cannot turn to make changes by yourself, and everything must be done decently and in order following the agreement.