covers your car against risks like theft, accident, explosion etc.
Car insurance companies determine the value of a car before and after an accident. The insurance Policy rates are proportional to its evaluated value. Therefore, those cars which rate high in value have higher insurance rates and vice-versa. High rate insurance policy plans are designed to provide large car insurance claims in case of a damage resulting out of an accident. If a car actually meets with an accident, its value is re-calculated to settle on the repair work charges to be paid by the vehicle insurance company. In case, the repairing charges of the car are greater than the car’s total cost, the insurance company will rather pay the total cost instead of the repair charges.
Actual cash value abbreviated as ACV is defined as the exact value of a car in the current condition. It is utilized as a base standard for determining the true value of a car for insurance purposes.
Note: All evaluations may not match with the car’s ACV. Following are a number of factors considered for determining a car’s ACV for car insurance cover:
Car prices differ in value from one dealership to another. This price deviation is mainly due to the estimated profit margin. Some of the dealers have a higher car sale. Therefore, they may charge a bit less in comparison to those who have a lower car sale. Hence, the insurance companies refer to dealer price surveys to determine the real worth of a car for calculating car insurance claims.
In order to determine the Premium for insuring a car, following factors are considered for the evaluation of car:
a)Insured Declared Value (IDV)
b)Vehicle Make & Model
c)Place of registration (Zone)
d)Additional covers taken
Some of the insurance companies also track the present trends of car sales and prices closely for providing car insurance cover. Therefore, they have their own internal price calculation algorithms. The price trends are also checked online at various web portals designed for old and new car purchase and sale.
Depending upon region to region different kind and number of taxes are applicable on the car manufacturers. Therefore, those taxes are well included while evaluating the real value of a car.
The registration charges deducted by the car companies also find an important consideration in the price evaluation process. Though, the calculations for a car’s Actual Cash Value are performed in-house by the respective vehicle insurance company, however, after an Accident insurance companies prefer a third party for evaluating the value of a car. Final insurance Claim is determined by the difference between the appraisal company’s value and the ACV evaluated by the company.
Apart from the above mentioned factors, car insurance companies consider many more factors for the evaluation purpose. These factors can be discussed with an experienced local car insurance consultant in detail. He has the most appropriate knowledge about the car’s ACV evaluation process. Also, online consultant can be contacted for a further insight in to the ACV calculation processes of other regions.