Underinsuring the 911

[pmax]

So, valuation looks like they are up.

I'm not interested in chasing it as far as the agreed value goes.

What are the risks of being underinsured ?

As far as I understand, the insurance company owns the car when they pay out what's in the contract. If I underinsure, wouldn't that mean I lose the car for less than what it's really worth in case of the total loss ?

[regency]

IMO, go with their value & be sure. It doesn't cost very much more.

Steve

[RANDY P]

So you want to drive the car daily? Yes, you would be insured for some $hit value using regular insurance.

The only way to get close to what these cars are truly worth means you need collector's insurance / stated value, but you have limitations.

rjp

[gamin]

The risk of being underinsured? You don't have the money to fix the car or replace it with a like example. I'm an example. Engine fire. Car totaled due high cost of repair. Went to auction. I matched high bid and kept car. Payout was agreed value minus auction price. Did not cover the costs of repair. Lots of out of pocket. Also, the car now has a total loss title. That's the risk.
Car is now insured for a proper amount.

[SiberianDVM]

I'll admit that my modded 1977 Targa is insured with GEICO, liability and collision/comprehensive, and I have absolutely no idea what they would pay out in case of a total loss. As a middie 911, I have been told it's not worth that much, anyway.

I have tried to get collectors insurance, but have been denied because I do not have a lockable garage, only a carport in the back yard, with a lockable privacy fence.

[wildthing]

I got into an accident back when a similar G50 could be had for as low as 17,500. Was with GEICO. They were going to mark the car as Salvage Title because the cost to repair was 14,500...

Shopped around for agreed value / collector ins. immediately after. There are many out there, most are discussed in this forum.

[pmax]

Originally Posted by gamin

The risk of being underinsured? You don't have the money to fix the car or replace it with a like example. I'm an example. Engine fire. Car totaled due high cost of repair. Went to auction. I matched high bid and kept car. Payout was agreed value minus auction price. Did not cover the costs of repair. Lots of out of pocket. Also, the car now has a total loss title. That's the risk.
Car is now insured for a proper amount.

Thanks for sharing that painful experience.

OK, that means if you don't win the auction, the end result is you get the agreed value and the car is out of your hands completely.

Another possibly hypothetical is what happens if the auction price matches your underinsured agreed value and you win it. So, in that case, does it mean you get nothing from the insurance company ?

[pmax]

And then there's the weird part I can't understand where the salvage title depends on repair costs exceeding your agreed value. If the latter is low, then you don't need a big repair to total the car resulting in the salvage. Someone said this insurance stuff is a scam, hmmm.

[Zeke]

Originally Posted by pmax

And then there's the weird part I can't understand where the salvage title depends on repair costs exceeding your agreed value. If the latter is low, then you don't need a big repair to total the car resulting in the salvage. Someone said this insurance stuff is a scam, hmmm.

They will total the car if the repairs get up around 70% of value. YMMV

[pmax]

Originally Posted by Zeke

They will total the car if the repairs get up around 70% of value. YMMV

Say for example, car is worth $100k and insured for agreed value $20k. So any loss less than $15k is covered. Any more results in a possible total in which case the owner can simply refuse the offer and be out $15k or whatever the repair costs are, is that it ?

[Zeke]

Originally Posted by pmax

Say for example, car is worth $100k and insured for agreed value $20k. So any loss less than $15k is covered. Any more results in a possible total in which case the owner can simply refuse the offer and be out $15k or whatever the repair costs are, is that it ?

I would only be guessing and using personal experience in that scenario. What I think would happen is that the ins co would give you the 20K and take the car to sell to a salvage yard. Of course you can arrange to buy it as stated in a previous post. They will simply deduct the salvage value from your settlement.

So to sum it up, 70% plus the salvage value justifies them cutting off the damage payment at a certain percentage. And if you know the collision business you know that the estimate usually goes up after the work is started and concealed damage is revealed. If the damage estimate is 50% of the value of the car, they can absorb some additional cost.

To further the point, they value a vehicle at wholesale rather than retail unless you have that agreed value.

If I were to answer your original question, I would answer yes. And if I was in that position, I'd increase the agreed value accordingly.

[pmax]

Originally Posted by Zeke

I would only be guessing and using personal experience in that scenario. What I think would happen is that the ins co would give you the 20K and take the car to sell to a salvage yard. Of course you can arrange to buy it as stated in a previous post. They will simply deduct the salvage value from your settlement.

What if the car auctions at $25K in the example ?

Does the insurance company keep the extra $5K ?

So to sum it up, 70% plus the salvage value justifies them cutting off the damage payment at a certain percentage. And if you know the collision business you know that the estimate usually goes up after the work is started and concealed damage is revealed. If the damage estimate is 50% of the value of the car, they can absorb some additional cost.

To further the point, they value a vehicle at wholesale rather than retail unless you have that agreed value.

Is that the case about the wholesale ? I thought the insurance company has to pay the replacement cost.

If I were to answer your original question, I would answer yes. And if I was in that position, I'd increase the agreed value accordingly.

The agreed value insurance looks like the odd one where the owner sets the value of the property. Isn't it the case that the owner bears all the risk of valuing the properties correctly in agreed value whereas with cash value insurance, in an ideal world which might be a high bar but not impossible given the comps are now readily accessible, the insurance company pays you what it's worth and bears that risk ?

I guess that's why the insurance company would have no issue with underinsurance but would require an appraisal for over. I think I can see now how the game is stacked in their favor in both cases, no surprise there.