If you're one of the unfortunate drivers whose car is either stolen, or damaged beyond repair, the value of your car will determine how much your insurer will pay. As a result, ensuring you have an accurate valuation is critical – particularly if you own a specialist, classic or unique specification car, where values can be harder to determine.
The most reliable way to ensure your car is accurately valued is to insure it on an 'agreed value' basis. Simply put, this is when a vehicle's value is declared to and agreed with the insurer at the start of the policy. It then becomes fixed for the policy period – 12 months in most cases. This will be the amount payable if the vehicle is destroyed in an accident, fire, or is stolen and not recovered. It can be altered throughout the year if the market moves and when the vehicle appreciates in value, necessitating an increase in the level of cover.
We understand that this can be confusing. That's why, to help drivers, we're pleased to confirm that we're making agreed value cover simpler, removing in almost all cases the requirement for a formal valuation. Below, we've outlined what that means for clients who are insured under one of our car club schemes.
It's important to highlight that Lockton is not a car valuer, and we are not able to provide any advice or guidance around what your car might be worth. We do, however, have access to a variety of resources where the figure you provide can be qualified and the value agreed. We also arrange cover for thousands of specialist vehicles, and each will have a value range, meaning that we can complete this qualification process easily.
Vehicles up to two years old
For vehicles up to two years old, our policy already provides New Car Replacement cover. This means your car will be replaced with a brand new one of the same specification. For vehicles up to £300,000, you won't need anything to support the valuation, so your car will be insured on an agreed value basis for the purchase price you tell us you paid.
If your car is worth more than £300,000, you'll need to provide a copy of the purchase invoice within 30 days of cover starting. If this cannot be provided, then cover will revert to market value.
Vehicles over two years old
For vehicles over two years old, a valuation is unnecessary. We will qualify the value you declare by using our own database of vehicles insured, combined with a variety of resources available to us. Your policy will then cover the vehicle on an agreed value basis. Our database will be used where five or more cars of the same make and model are already covered.
If your car is a very low volume or unique model and information around values is hard to locate, we may have to ask you to provide some supporting information, such as examples for sale and a valuation will continue to be necessary if the value is more than £500,000.
Vehicles insured on a reinstatement basis
Some vehicles have undergone extensive restoration which, in some cases, exceeds the cost for which the vehicle might be sold. It remains possible for our policy to cover this sort of car with a valuation based on the cost to reinstate it to its 'as restored' condition. Where this cost is more than 125% of the car's market value, we will need to see a breakdown of the restoration costs or continue with the need for an independent valuation within 30 days of cover starting. If this cannot be provided, cover will revert to market value.
Vehicles insured on other policies
If your car is insured on a policy outside our car club schemes, it can also be insured on an agreed value basis. The New Car Replacement up to two years old also applies.
What do you need to do?
We would encourage you to check your car's current value, whether agreed or otherwise and let us know if an amendment is needed.
Unlike your daily use vehicle, many classic and specialist cars tend not to depreciate, and can even appreciate in value due to rarity or demand. What's more, the values of daily use vehicles have also been subject to unusual fluctuations since 2020. Likewise, the values of limited-edition models may not be simple to pinpoint, so any assistance will be helpful.
We'll do our best to have your value agreed, but if this is not possible, we will communicate this to you and explain why. If the value falls outside the parameters set by our database, then you can challenge this through a valuation from a reputable source, such as your club or a specialist car dealer.
For more information, visit our website, or contact Andy Couper, Lockton's Head of Specialist Motor Trade Insurance at andy.couper@lockton.com.