Having the right insurance cover if the worst happens is crucial if you want to ensure you get back what your classic VW is really worth. That’s why ‘Agreed Value’ policies exist. But how do they work – and crucially, why is it so important for classic VW owners to ensure their valuation is up to date? We have all the answers…
Agreed value insurance is where an insurer agrees to pay a set amount in the event of a total loss, without fear of there being any quibbling over what a vehicle’s actually worth. In a nutshell, it allows the policy holder to secure their investment.
As Craig Darwin from VW Heritage Insurance confirmed: “An Agreed Valuation is important if an owner has a cherished vehicle that has been lovingly restored and is in better condition than many of its counterparts. In the event of it being involved in an accident and rendered beyond economical repair – a Total Loss – naturally the insured would wish to be reimbursed for the full value beyond what is deemed market value.”
Beware rising VW values!
But here’s the snag. While such cover insures against depreciation (not that it’s ever likely affect vintage Dubs!) crucially, any upwards movement in values could result in problems if the amount agreed hasn’t been updated. Now, given the massive surge in values of VW buses and nice bugs, that could be a major issue!
Said Craig: “Many insurers require a valuation every other year or for some vehicles on an annual basis. This is due to classic vehicles values increasing at quite a pace in recent years and having an up-to-date valuation will prevent the vehicle being under insured in the event of a Total Loss.” In short, if you’ve got an agreed value policy and own a really nice VW, it’s crucial to keep an eye on the marketplace and let your insurer know if you’ve spotted an upward surge in values.
Why bother then?
The obvious question, then, if values are going up all the time, why have an agreed value policy in the first place? Surely, if you don’t have it you won’t risk being caught out with an agreed value that’s too low. After all, an insurer won’t pay ‘over’ a previously agreed sum.
According to Craig, there argument is stacked heavily in favour of taking out the necessary cover. “If there is no agreed valuation in force insurers will provide the ‘market value’ in the event of a total loss. This means they will compare the condition of the vehicle to others they insure and use other mediums for gauging the value and making a settlement offer so there’s a risk of getting a far worse settlement.”
How do you agree a value?
Obviously one man’s trash is another man’s treasure and it’s important to agree a value in the first place. So how’s it done? Insurers usually take a verbal valuation initially at the quote stage, and then the insured will be asked to submit a completed form and, in the case of VW Heritage Insurance, six photographs of their vehicle.
Said Craig: “We have three in-house valuation team members who then view and agree (in the vast majority of cases) on the valuation and confirm by sending a certificate. Occasionally a valuation is deemed outlandish and way out of sync with other vehicles we have insured. In these instances we’d go back to them and ask for reasons and if an agreement not reached we’d ask for an unbiased independent valuation – sometimes that can be a club official or an independent specialist.“
Newer classics
Most classic insurers offer an agreed valuation option integral to the policy. However there are cases where an insurer doesn’t – particularly in the case of newer, modern classics. VW Heritage Insurance, however, can provide a valuation on vehicles that are newer and ordinarily wouldn’t qualify for ‘classic’ status. Such policies are available as standalone products with prices starting at just £24.99.
Now that sounds like not much money for the peace of mind it offers and the fact that if the worst should happen you won’t be faced with months of arguing over what your vehicle was really worth…
Ian
The opinions expressed here are the personal opinions of the author and do not necessarily represent the views and opinions of VW Heritage