Quite a few people are highly disappointed with the valuation of their automobiles by claims adjuster when it is totalled. This is because they have a different idea of how much their vehicle is worth. Some even believe that they will receive the amount noted as the value in their policy. This is not the case as depreciation is taken into account.
It is best to understand how insurance works to avoid disappointments and paying too much premium over the years. When a policyholder provides a valuation for their vehicles insurers will charge them the appropriate premium based on this figure. They will not argue about it or care what you like to put down. And when you have a total claim they will make their own judgements although you might have a little say in it. If you over value it you will only be paying extra premium.
However, if you under value you may have a problem later on. For example, if the car is worth $10,000 and you told the insurer it was $7,500 the claim payment will work on a pro-rata basis. In other words, you would be assumed to have insured 25% of the vehicle by yourself.
When a vehicle is totalled the claims adjusters look to ascertain the open market value of it. Normally, they would take at least two same model, age and condition cars that are being sold right now in the market and they will offer you the average of two prices. You may be able to take another two similar cars and show them that the average is little higher than what they offer you. There is high chance that they will agree to offer you a little more for the sake of keeping you happy and closing the claim quickly.
When you are insuring the auto you can have a look at the latest price of it if you were to sell it now. It is not hard to figure this out as there are many websites listing used car sales. Quickly check the ones similar to yours and you will see how much it would be worth. You can add a little bit more for the extras you bought or installed over the years. Remember that insurers will not pay for removable electronic items like navigation.
If insurers were to pay the amount listed on the policy there would be many fraudulent attempts to make money from this process. People would insure cars at a lot more valuations and torch it to get a lot more money than they paid for it. It is only logical that insurers replace your losses. The idea is that you are neither better nor worse off following an insured loss.
Arranging a car insurance policy is not a complicated task. Nonetheless, a few points should be kept in mind. Also a little attention should be paid to make sure that you only pay a fair and reasonable premium. If you do not understand any point, term or condition in your policy it is best to find out about it by checking online or asking the agent.