Quotes for car insurance aren't enough to cover the cost of a replacement car.

Quotes for car insurance where you receive an agreed value or a market value may not be enough to purchase even the lowest priced replacement car from a dealer if you car is written off, based on information from the car valuation sites.

I generally cover my car with comprehensive insurance. I expect that I'll be out of pocket for the excess should I be in an accident.

However what I didn't expect is that if a car is written off that the insurance wouldn't cover the car so you would be able to purchase a similar aged second hand car from a dealer.

I'd highly recommend that you check your insurance policy and see what you'd be paid should your car be written off. Now check the car valuation sites to see how much it would cost you to buy the same age, make and model car.

In many cases people will be out of pocket thousands of dollars. Without realising it the standard amount agreed to in insurance policies is often well below what you'd have to pay to get a replacement car from a dealer, whether you have an agreed value or market value policy.

Don't wait until you're in an accident. Make sure your policy covers you for what you expect. Whilst I haven't been in an accident, when I found out that the insurance I've been paying generally won't cover me as much as I expected. It really means you have to check if the insurance premium you are paying is worth the money.

To put this into context, if you take what you'd be paid by the insurance company less the excess, you may only have about half the money you need to put you back into a similar car. Most people take out insurance to cover themselves so if they are in an accident they are not worse off. Make sure your insurance covers you and don't fall into this trap.


Kelvin Eldridge
www.OnlineConnections.com.au
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