What does daily value mean for a car insurance?
The current market value is the amount of money that a car is worth at the time when its value is determined. The amount is based on several factors.
Immediately after buying a new car, you already lose a lot of money on the value of the car. For example, a new car is worth € 25,000. As soon as the car is registered in your name, the car is second hand. The value may then have dropped to €22,500. You do not buy a car as an investment, but the value of the car can make a big difference when settling a claim.
Is the daily value important in case of damage?
In case of damage, the current market value can play an important role. Car damage will be repaired, unless the repair costs are higher than the current market value of the car. In that case you will be paid the current market value of the car. The car is then a total loss. So you benefit from a high current market value.
How do we determine the daily value?
When determining the current market value, the estimated value just before the accident is used. The amount of the current market value is not a science. An expert estimates this amount. The following factors, among others, determine the value:
- The catalogue value. What was the car worth when new?
- Age of the car.
- Brand and type. The amount of depreciation of the car may vary depending on the brand and type.
- Mileage. A car with many kilometres on the counter has a lower current value.
- Accessories. Self-added accessories can increase the car's current value.
- General condition of the car. Did the car have any damage before the accident and how was it maintained? This can make a big difference in determining the current value.
There are more factors that play a role. Even the colour of the car can influence its current value.
Insuring your car at its new value
If you have a (reasonably) new car, in the event of a total loss you will not be satisfied with the current market value. For this amount you cannot buy a new car. Insurers offer the new-for-old value arrangement in car insurance. For a certain period of time, you will be paid the new-for-old value if the car is totaled. This period varies from 1 to 3 years. There are insurers who do not pay out the full new-for-old value after the first year. For example, from the twelfth month a depreciation of 1.5% per month is applied. In the event of a damage after 14 months, the insurer will not pay out €25,000, but 2 x 1.5% = 3% less.
Can I insure my car for its purchase value?
When you buy a used car, you can insure it for the purchase value. In case of a total loss, for a certain period of time, the purchase value of the car will not be taken into account. This can be for a period of six months, but also three years. Insurers may have set a ceiling. The regulation applies, for example, to a purchase value of € 50,000.
Does the daily value matter in case of damage?
In case of damage, whether a payment follows depends on the coverage chosen in the car insurance. The WA car insurance only pays for damage caused by your liability. The WA + limited casco and all risk car insurance also cover certain damages to your own car. However, no more is paid out than the current market value of the car. This is the value of the car for which the vehicle could be sold just before the damage occurred. If the cost of repairs exceeds the car's current market value, it is referred to as a total loss.
Do they sometimes pay out more than the daily value?
In some cases, the daily value is not taken into account, but the new value. This is the case with car insurances with a new value clause. In case of damage, these insurances assume the new value instead of the current market value. The new-for-old value arrangement applies for a period of one year up to three years. In case of an accident, this can make a big difference.
For example:
You buy a new car with a catalogue value of €25,000. You choose an all-risk car insurance with a new-for-old value arrangement for a period of three years. In the first year you are involved in a serious accident. The car is technically irreparable and is declared a total loss.
The daily value of your car before the accident was €21,000. Normally, you would be paid this amount. Your insurance policy with the new car value scheme pays out €25,000. With the benefit you can buy a new car.
What does the vehicle purchase value scheme involve?
After buying a used car, you can benefit from the purchase value scheme. In the event of a total loss or theft of the car, for example, in the first three years (or less) the purchase value of the car will be used in the event of damage. In general, this is higher than the current value of the car.
When comparing car insurances, you can consider the purchase price or the new car insurance. In the event of a claim, it can make a big difference.
Related pages on car coverage
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