Quote:
Originally Posted by Hydramada
TRUTH! My agent at State Farm knows what he is doing and got me a very reasonable quote. Be sure an insure for "agreed value" to make sure that if you ever lose your baby you have the funds to replace.
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Unfortunately, the "agreed on value" is only used to determine your value at the time of insuring it. That also determines your premiums.
The actual cash value of your car will be determined at the time of loss and will be based on the actual private seller value of your vehicle at the time of the loss. In other words, the actual cash value of your car will be its fair market selling price at the time of the loss. Generally, that is substantially less than what you paid for it.
Example: An $80,000 Mercedes is totalled after two years of ownership. This vehicle now sells used for $60,000. That is what the insurance company will pay for it. Not the original purchase price.