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Policy Limits |
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Most insurance policies also have maximum limits the insurer will pay out in a claim
and will usually depreciate your car to its pre total loss value. Here are some examples taken directly from the Key Facts of several
UK insurance companies...
- The most We will pay is the Market Value of Your Car, Accessories and spare parts when lost or damaged and this will not be
more than the amount for which you insured them. We will retain the right to the salvage of a vehicle following a total loss.
- If you have bought your car under a finance or hire purchase agreement, or
are leasing it, any money owed to the company or bank involved
will be paid directly to that company or bank first and
any balance of the agreed settlement sum will then be paid
to you. (Note *This is an important statement as it lets
you know that the insurer will not pay the full amount,
but the agreed settlement sum! Normally this will mean the
book value. Not good news really.)
- We (The Insurer that is) will not pay more than the lesser of the Market Value of the Car at the time of the loss and the
amount your car is insured for less any Excesses. If you bought your car at a lower price than would normally be found in UK
trade guides, We (The Insurer that is) will reduce the Market value accordingly. (Note *Another important factor to think about.)
- Cover for the loss of or damage to any radio, cassette,
disc player or similar apparatus generally only applies
to equipment permanently fitted to your car and in certain
cases only applies with fully comprehensive insurance. The
maximum payout should be agreed before you actually buy
your insurance and often there is a sliding scale for the
remuneration dependent on the level of cover you buy.
- Higher excesses apply to younger or in experienced drivers so be aware of
this.
- Damage to property by Your Car is limited to a pre set amount which varies between insurers and will almost certainly include all
costs, expenses and indirect losses.
- There is a pre determined maximum amount the insurer will pay towards loss or damage to personal belongings carried in or on your
car caused by fire, theft or accidental means, so know what this limit is as it is normally very low.
As you can see from the above, it is very important that you make sure the maximum insured would be sufficient to cover your loss.
With cars in the United Kingdom and indeed even America now depreciating at a faster rate than ever before, more and more people
are choosing to separately insure themselves against the depreciation with a good GAP Insurance policy.
However make sure the GAP Insurance you choose is the right
one for you. There is a cheaper Finance GAP option which may
look attractive to you at first, but it may not be the one you
actually need. To protect against depreciation you may well
find that you should consider"Back to Invoice" or "Return to
Invoice" cover. Many new car and used car dealers sell this
at a huge mark-up leaving you out of pocket all because they
simply want to add big commissions to their products. The same
products that you can buy directly from insurers found advertised
on web sites online.
Here is something to pay particular attention to when buying
your car insurance..
Cover does not apply to loss or damage arising from the theft of your vehicle whilst the ignition and/or entry and/or
immobilisation key(s), transmitter(s) or other entry devices have been left in or on your vehicle.
Cover does not apply for loss or damage caused by an inappropriate type or grade or fuel being used.
Cover does not apply for damage to tyres caused by application of brakes or by punctures, cuts or bursts.
Please refer to your policy document for a full list of exclusions as this is an exert taken directly from a UK insurers Terms and Conditions.
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