You're insured... but your kinda not, sort of!

I found this email very annoying from my insurers:

How much would you receive if you wrote off your bike?

If you think you'd receive the price you paid for your bike then you'd be wrong! Your bike insurance would only give you the Glass's Guide retail value, which could be far less than you paid.

Guaranteed Asset Protection (GAP) Insurance protects the value (or any outstanding finance) of your bike in the event of a total loss. It can pay the difference between the price you paid for your vehicle and the value that your insurer will payout after depreciation, example:


Cost of bike = £12,000 (any value to £25,000)**

Vehicle written off after 18 months,
Insurance company payout = £8,000

GAP Insurance payout = £4,000

Premiums can be paid in full or 10 monthly instalments and start from just £142* for 3 years cover.

eBike's sister company, Quota Marketing - the GAP insurance specialists are offering an exclusive £20 off your GAP quote.

I'm just amazed my insurer is saying; 'we know we are going to scr*w you, but if you pay us extra we won't!'

Insurance is a business of risk. They are betting you won't wreck the bike. You are betting you will. Nobody really looks at it that way, but that's what is happening. If you're really so certain you will wreck your bike...and you want to be fully reimbursed so you can go out and do it again on their shilling...then they want to be paid some more £'s to assume that risk.

Foremost insurance in the USA had a very nice policy for new bikes. If you bought the bike new from a dealer, and insured it with them within X# of days, they would replace the bike with the same model of the current year if you wrecked it, or had it stolen. I probably should've gotten their insurance on this current 2008 Burgman 400 that I bought last April. I paid $4K for it new, and the 2011 model is $8K. If I wrecked it, the policy would more than pay for itself.

Most insurance companies will pay the book value. The surprise many people get when trying to sell their bikes, is how much depreciation they incurred in the first year or two. Your insurance company is just trying to tell you that if you want that depreciation paid as well...then pay us for that risk.

Remember...you are betting you will wreck it.

Chris

Although I haven't done so with either scooter, I usually purchase GAP insurance for the first year after a new car purchase. Basically, I am paying to insure my vehicle for more than it's worth, plus the profit the dealer is likely to make, if my vehicle is destroyed.

If I was financially willing and able to pay the difference between the book value of a recently purchased, but now destroyed, vehicle and the purchase price of its replacement, then I would not choose GAP insurance. However, I don't expect anyone to insure my vehicle for more than it's worth in a standard policy.

While it is popular to hate insurance companies, the fact is that insurance is generally meant to cover your actual loss, i.e. to put you in the SAME position financially as you were before the loss, not a better one. So if you total a 1 or 2 year old vehicle, you should be paid what a 1 or 2 year old vehicle is worth, not what a new one is worth. If you want to have the insurance company improve your financial position you should expect to pay more $

Chris

One of the questions insurnace companies ask when taking out a policy is "What is the value of the item?" This is one of the factors they use to determine your premiums. It is really annoying to find that they have used the value £2x and they are only willing to pay out £x in the event of total loss.

Most contents and other insurances are 'New for Old', that it to say they pay you what is would cost now to replace an item. In other words it has built in GAP insurance. Vehicle insurances generally will only pay full replacement value within the first year from new if you are the first owner.

All in all another area where were are being 'suckered'.

Cheers,

What actually happens when you write-off any vehicle, is that someone at the insurance company, usually an "engineer", will look at Glass's guide and then find a few examples of your vehicle, in the for sale section of a local paper. If they are able to find said vehicles, then they will offer you the Glass's price. If, and I mean IF they are a decent company, and they can't find anything that matches approximately the mileage, condition, model etc, pre accident, they will be swayed on price if you provide some examples yourself. If they are not very professional, they will offer a price and hope you don't know your rights. Also, if the vehicle is written-off purely because of the cost of cosmetic items, they may alow you to keep the salvage at a small cost, which in the case of a Swing, is very possible with the high cost of tupperware. I've dealt with motor insurance companies for over 25 years so if you live in the UK and are unfortunate enough to have this type of problem, I'd be happy to help, if you need it.
Ian

I don't think it's fair to compare household goods to motor vehicles. They don't expect you to realistically go out and try to find a 4 year old DVD player to replace the one that was lost in a fire, etc. wheras it's usually possible to find a comparable 4 year old vehicle fairly easily in the used vehicle market. Also keep in mind that in many circumstances they don't just hand over cash for household items and personal possessions. If you want a cash pay out instead of going out and buying a new replacement and giving them the bill,, they will often pay only the depreciated value. And in a major loss such as a fire, it's not worth their adjusters' time to try and figure out a depreciated value for perhaps hundreds of relatively inexpensive items, so they just tell you to replace them and cover the bill. You really can't compare home owner's and auto insurance - it's apples and oranges.

tarmacburner2 wrote:

One of the questions insurnace companies ask when taking out a policy is "What is the value of the item?" This is one of the factors they use to determine your premiums. It is really annoying to find that they have used the value £2x and they are only willing to pay out £x in the event of total loss.

Most contents and other insurances are 'New for Old', that it to say they pay you what is would cost now to replace an item. In other words it has built in GAP insurance. Vehicle insurances generally will only pay full replacement value within the first year from new if you are the first owner.

All in all another area where were are being 'suckered'.

Cheers,