Insurance companies

[Apoc]

It's different because you effectively artifically create value by over insuring

As long as you are paying the increase premium for the increased value (whether real, perceived or artificial) are there any risks/implications from that?

Yes... because you can insure a car for 10k for a year and then say it was stolen and get paid 10k when in reality it was only worth 2k. Overinsuring is one of the most common types of insurance fraud so companies require that you prove you're out that specific amount to prevent you from just jacking up the replacement cost. They want to know your loss of asset is similar to their liability so you won't falsely claim loss to make money. Their rates are based on the statistical "break even" for your vehicle and if you're incentivized to claim false loss their model is out the window.

Kaan really should consider double-checking his policy about the details. He could be paying that premium for nothing because there's a decent chance they won't just cut him a check without receipts.

I was a financial analyst for Allstate... ask me how I know.

[Ginger]

As long as you are paying the increase premium for the increased value (whether real, perceived or artificial) are there any risks/implications from that?

I think so.

Consider the man that insures his, hmm, I dono, 2 tone 1993 Accord, for 10 grand in aftermarket parts. He's pays the increased premium for a couple months and all of a sudden the car disappears.

Consider next the man that purchases an expensive vehicle. He has used his assets, or claim to future assets (lien), to purchase this vehicle.

The man that had the Accord didn't have to show assets at all... he just willed his modifcations into effect and told the insurance company they existed. He's got an incentive to find a way to dump the car early on - he stands to gain from it if he doesn't have to provide evidence of modifications. Insurance COULD simply charge absurdly high rates for this kind of thing, but requiring reciepts is a good way of keeping the rates competitive (remember, some people actually want to purchase this coverage and there is some providor that wants to find a way to provide it to them) and realistic. It effectively eliminates that incentive.

Somebody could call up their insurance company and ask about this kind of coverage... but I've talked to my company too much recently.

[Ginger]

Derecola beat me to it with less words.

But I want to sound smart, so my post stays

[ziich]

I'm going through this mess right now. I have little to now receipts but I'm claiming everything I put into the car in hopes of some sort of compensation. I'll let you know how it goes.

[Evan]

let me get this straight.

Person A and B have identical driving records.

Person A drives a 2002 Honda Accord. Appraised value $12,000.
He is paying insurance on a $12,000 value car which evaluates to $100 a month.
His car get stolen and the insurance company pays him $12,000.

Person B drives a 1989 honda shitpile. Appraised value $2,000 + $10,000 declared value.
He is paying insurance on $12,000 value car which evaluates to $100 a month.
His car gets stolen and the insurance company pays him $12,000.


if you are trying to tell me those arent the exact same thing I think you have a screw loose.

[Kaan]

Its been pretty easy for me to get stuff done with progressive since i've been a customer for 12 years... with one accident my fault, and some tickets. Nothing has ever been stolen.

[Apoc]

Person A and B have identical driving records.

Person A drives a 2002 Honda Accord. Appraised value $12,000.
He is paying insurance on a $12,000 value car which evaluates to $100 a month.
His car get stolen and the insurance company pays him $12,000.

Person B drives a 1989 honda shitpile. Appraised value $2,000 + $10,000 declared value.
He is paying insurance on $12,000 value car which evaluates to $100 a month.
His car gets stolen and the insurance company pays him $12,000.

You're assuming the $12k is automatic, in most cases, it isn't. Being underwritten for the amount is not proof of value. What we're saying is the insurance company will require that Person B prove the value of his car was $12,000 before they pay on that. Insurance companies don't just pay what the policy is for, they require proof that you lost that amount. When the car is worth $12k and it's missing or destroyed, they have that proof. When the car is worth $2k and there is an unsubstantiated loss of $10k, you need to prove that $10k... with receipts.

Its been pretty easy for me to get stuff done with progressive since i've been a customer for 12 years... with one accident my fault, and some tickets. Nothing has ever been stolen.

Don't assume you'd get a payout. Check the specifics of your policy.

[Mike]

chris, i'm interested in insuring my car for a few k in parts, but i don't have any receipts. is there anything i can do? photo documentation? does it really depend on the specific carrier (i should call them)?

[Apoc]

chris, i'm interested in insuring my car for a few k in parts, but i don't have any receipts. is there anything i can do? photo documentation? does it really depend on the specific carrier (i should call them)?

It really depends on the company. In most cases, photo documentation is enough but if you REALLY want to be safe, you might ask them if they support appraisals. You basically drive to a certified/approved appraiser and they value your car based on the current condition. Bringing printouts/catalogs that have the same parts retail value doesn't hurt in case they try and whore you and/or don't know what something is worth.

[WRXtranceformed]

Travis, if you read this I strongly recommend you call your insurance company and see if they can give you coverage on some of the parts on that car. I gave you the receipt for the motor work in case it's ever smashed to bits, that would be a nice chunk of change to have!

[Kaan]

I asked them about it... i read the policy. no photos and documentation are required. hell the first year i was paying almost $300 a month for the coverage. they have their money... from someone who doesnt have a track record of stolen items and only one insurance claim... i'm not a "risk."

if it is stolen and not recovered in 30 days, automatic cash out... if its recovered in 30 days they will put it back to the way it was with the documentation i have... the latest motor swap... or total it out... its all on the adjuster.

I have the policy... and i have the bill i wrote everything down on (reps name, time, date, etc) filed away... the rep said that progressive does not cover individual parts... you name the dollar amount you think you have spent up to $10k and then you pay your premium adjusted to the car and the amount you want over. its not complicated people.

[Andy]

Here's a question: Instead of paying a company a high premium for parts that may or may not be covered, why not set aside that money as if you're paying that amount to an insurer? That way, you could have money set aside in case of theft with the added flexibility of money accruing interest that could help you out in an emergency.

So in Kaan's example, instead of paying 300 a month. Why not pay liability of his CRX and pocket the difference. Set that aside for a rainy day. Obviously, I don't know the ins and outs of Kaan's situation, I'm just using that as an example.

[Dave]

That's devil talk Andy!
Nobody in this club has that kind of willpower, we'd much rather go out and buy another busted pile.

[Apoc]

Here's a question: Instead of paying a company a high premium for parts that may or may not be covered, why not set aside that money as if you're paying that amount to an insurer? That way, you could have money set aside in case of theft with the added flexibility of money accruing interest that could help you out in an emergency.

Well... that's the sort of figuring most should do when they get insurance.

A lot of bike folks don't get full converage because the cost of the premiums is more than their statistical chance of loss. ($2k/year for a $4k bike and they think they can go 2 years without totaling it)

[Sijray21]

Here's a question: Instead of paying a company a high premium for parts that may or may not be covered, why not set aside that money as if you're paying that amount to an insurer? That way, you could have money set aside in case of theft with the added flexibility of money accruing interest that could help you out in an emergency.

that's kinda my approach when it comes to insurance too, except i let the money burn on goodies instead of saving it :x

[Ginger]

I asked them about it... i read the policy. no photos and documentation are required. hell the first year i was paying almost $300 a month for the coverage. they have their money... from someone who doesnt have a track record of stolen items and only one insurance claim... i'm not a "risk.".

In other words, receipts were substituted with cash value.

Evan - you can't see the difference b/w incentive to defraud and proof of value? Who has the screw loose?

[Andy]

except i let the money burn on goodies instead of saving it :x

Let the asian in you take over. It'll steer the ship better

[Kaan]

i was living in woodbridge at the time, who knows if it was going to get stolen or not.... and it was $60 more than i was paying a month already... not that big of a jump.

i also still had some major tickets on my record at the time i'm sure... and getting more by the month.

[Ginger]

hell the first year i was paying almost $300 a month for the coverage.

and it was $60 more than i was paying a month already

So, um, which is it?

*edit* I think I know what you're trying to say... but it's hardly being objective.

[Evan]

You're assuming the $12k is automatic, in most cases, it isn't. Being underwritten for the amount is not proof of value. What we're saying is the insurance company will require that Person B prove the value of his car was $12,000 before they pay on that. Insurance companies don't just pay what the policy is for, they require proof that you lost that amount. When the car is worth $12k and it's missing or destroyed, they have that proof. When the car is worth $2k and there is an unsubstantiated loss of $10k, you need to prove that $10k... with receipts.

then the insurance company is stealing your money.
you are paying premiums on a $12k car. that is my point.
the insurance company cant come back and say "we know you have been paying your premiums on a $12k car but we arent going to pay out what you have been paying in" they took your money on that $12k, they are (or should be) required to pay their part of the bargain.

i understand what you are saying, but we are talking about a total loss for the policy, not a fender ding which of cousrse is a fractional loss