One of the most common complaints with insurance is disagreement over the value of a vehicle at the time of a claim. Ben Rickard from BuiltIn Insurance helps you to get this right
Most commercial vehicle insurance policies cover up to the sum insured (the value shown on your policy) or the market value of the vehicle at the time of the loss, whichever is lower.
This is generally only an issue with “total loss” claims, though these are increasing as cars include more technologically complex and costly systems.
If the vehicle has to be written off the insurer will get an assessment of its value at that time and this is what they will pay (or the sum insured if that is lower). You can request additional valuations and obtain your own also if you disagree with their valuation.
If you get the sum insured as close to the vehicle’s market value when you first insure it (and when you renew it each year) you will greatly reduce the chances of a disagreement at claim time.
Market value is generally defined as the reasonable sale price of the same or a comparable vehicle immediately before the loss, excluding GS and any signwriting, wraps or artwork, but including the value of accessories.
This value needs to take into account the condition and distance travelled of the vehicle. It is effectively what a person could sell it for on the open market.
Here are some ways to help you work it out:
Ask your Registered Motor Vehicle Trader (RMVT) – visit motortraders.govt.nz to check the traders in your area.
Visit driven.co.nz for a free calculator for light vehicles
Check out trademe.co.nz for a good guide to vehicle sales prices.
Contact a professional valuer like Manheim by emailing valuations@manheim.co.nz or Turners at turners.co.nz.
GST
For businesses the value you insure the vehicle for should be excluding GST. The insurer will add this on at claim time as it can be claimed back.
Accessories
In one common policy, ‘accessories‘ are defined as: “A fitting or attachment that alters the performance, characteristics of, or is designed for use in, a vehicle to which
it is attached but without which the vehicle would still operate, car tools, spare parts, and emergency aids, used exclusively for the insured vehicle (including when temporarily removed from the insured vehicle), for example but not limited to: on board computers, telephone installations, satellite navigation devices, remote controls for attached plant, load securing or protection equipment in, on or in connection with the insured vehicle, and racking installed in tradesmen’s vehicles, but not any mobile telephone or personal audio equipment unless permanently attached to the vehicle.”
Agreed Value
You can also choose an agreed value policy, which means the insurer will pay the actual sum insured for the vehicle if there is a total loss claim. Some insurers offer this option without a valuation, however others will require a professional valuation before accepting an agreed value.
Trailers
These are considered vehicles for the purposes of insurance (because they are road registered), so won’t be insured under a “contractors equipment” policy. If they are attached to a vehicle and hit something else the damage caused will be covered by the liability section of the vehicle’s policy. But to cover theft or damage to the actual trailer it needs to be insured individually. Some policies will include light trailers up to a modest value automatically, others will require them to be listed and will charge a premium, so make sure you check your own policy.
This article is not exhaustive and you should conduct your own assessment of your specific needs, perhaps along with an insurance/risk management professional adviser. There are other policies to cover different risks. Individual policy wordings from different insurers may vary. You should refer to the specific exclusions in your own policy wordings and discuss them with your insurance adviser if you are unsure.
Builtin are New Zealand’s Trade Insurance Experts. For more information visit builtininsurance.co.nz, or contact us at hello@builtin.co.nz or 0800 BUILTIN.
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