What does daily value mean in 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 are already making a significant reduction in its value. For example, a new car is worth €25,000. Once the car is in your name, the car is second-hand. The value may have already dropped to €22,500. You don't 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 the case of damage, the daily value can play an important role. Car damage is repaired unless the repair costs exceed the car's current market value. In that case, you will be paid the car's current market value. The car is then totaled. 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, you will not settle for the current market value in the event of a total loss. After all, you cannot buy a new car for this amount. Insurers offer new-for-old value coverage in car insurance policies. For a certain period of time, you are paid the new-for-old value if the car is totaled. This period varies from 1 to 3 years. There are insurers who no longer pay out the full new-for-old value after the first year. For example, a depreciation of 1.5% per month is applied from the twelfth month. In case of damage after 14 months, €25,000 is not paid out, but 2 x 1.5% = 3% less.
Can I insure my car for its purchase value?
When buying a used car, you can insure the car at its purchase value. In case of a total loss, for a certain period of time, the purchase value of the car is used instead of the current market value. This can be for a period of six months, but 3 years is also possible. Insurers may have set a ceiling, though. For example, the regulation applies up 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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