Insurance
& Diminished Value
Collectibles,
Classics, and Custom vehicles have increased in value, it is very
important to understand the correct value.
Insuring a
vehicle is the most common reason creating a need for an accurate
valuation followed by, financing, buying, selling etc. Regular insurance
may cost a fortune; collectible insurers may have lots of restrictions.
If you intend a reasonable amount of use, be careful, read between
the lines, don’t delude yourself in thinking you will be able
to work around the restrictions.
Establishing
and protecting the value of your vehicle is one of the most important
things you will ever do if you intend to continue to own a Classic.
The most important figure, (which all decisions as to whether there
will be a cash settlement, repairs, totaled, etc.) is based on the
actual cash value immediately prior to loss.
Actual Cash
Value is what your vehicle is worth at a specified period of time.
A regular insured vehicle will be compared to other vehicles of
similar year and model. Many of your vehicles are very rare; you
need to know the current value of your vehicle.
All insurance
policies should be considered contracts. They are legally binding
agreements between you and the insurance company. Basically they
are agreeing to make you whole if you have an insured loss. They
may repair your vehicle to your satisfaction, if so great, however
most deputes begin when a theft or total loss occurs. The insurance
company will pay you the actual cash value immediately prior to
the loss or the maximum value of the policy which ever is less.
Insurance applications
require your signature and will include terms and conditions that
may allow (at time of claim) re-evaluation of the value of your
vehicle and that you agree to settle any disputes through arbitration
and not to sue until all these conditions have been meet.
When your vehicle
is insured under a stated value or specialty vehicle policy its
value is noted as supplied by you or a professional appraiser. This
value will be the limit of the insurance company’s obligation.
More often
than not, the first time a professional will look at the given value
of your vehicle is when you submit a claim. Your given value will
be carefully evaluated. Hopefully your value will have been established
by a professional appraisal. Don’t wait till this point to
establish the value of your vehicle.
An appraisal
completed by a competent professional will be your best asset. Replacement
Value is legally determined by approved methods found in state insurance
codes or uniform arbitration laws.
Many owners,
when making a claim, resort to clipping ads from newspapers, Hemmings,
Autotrader, etc., adding up receipts, you are wasting your time.
To dispute the insurance company you will need to retain an appraiser.
The after-the-fact appraisal will be much more difficult and costly.
Polk & Associates
appraisals will reflect the Replacement value as of the date of
inspection, based in part, upon comparable vehicles of similar condition
and authenticity, which are available in the open market. It has
much greater value to have completed the appraisal prior to a claim
filed with an insurance company.
Our appraisals
are completed in accordance with the Uniform Standards of Professional
Appraisal Practice, which are widely accepted as the industry standard
and accepted by the insurance industry, financial community and
in arbitration.
Our appraisals
will give a good idea of what you can reasonably expect to receive
in the event of a claim. The appraisal will document insurers pre-claim
knowledge of substantiated value.
GET
AN APPRAISAL BEFORE YOU SHOP FOR INSURANCE
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