If we look at the automobile policy, we can verify that many of the covers included refer to the market value of the car or to the new value . At other times, we talk about replacement or market value. Do you know how your insurer is going to value the car in a total loss ? The answer is described in the policy, but it will help you to know what the Insurance takes into account when evaluating the vehicle after an accident.

Who more and who less has a special affection for their car, either because it is our preferred means of transport, because it makes our work easier and represents the best ally of family leisure. Every driver knows better than anyone the value of their car for him, but we may not have noticed how Insurance values ​​our car . And it is important.

When you buy a vehicle it is easy to give a number. You have as a best reference the price you have paid for your car to the dealer, although that value lasts for a very short time. In fact, at the same dealership a new car can lose 10% of its value or more just because it is registered and becomes a kilometer zero .

In addition, the passage of time and use undermine the valuation of a vehicle significantly. So the price of new cars is very different from used, pre-owned or second-hand cars.

 

Car insurers also take this depreciation into account when valuing a wrecked car. In the coverage for loss of the vehicle or for Own Damages , the valuation of the vehicle is key when determining whether, in order to comply with the contracted coverage, the repair of the car or compensation that compensates the loss of the vehicle. 

 This is because a clause can be included in the Insurance condition that enables the company to declare the car totally sinister if the cost of the repair exceeds the value it gives to the vehicle. 

In the event that the damaged vehicle is not the culprit of the accident, things change, since when the culprit is the opposite vehicle, the other party has the right to demand that their car be repaired. 

Be that as it may, if unfortunately an accident leaves the car for scrapping or suffers a devastating fire or it is stolen from us and it does not appear, it is then when the user is affected by the way the car is valued by his insurer. That is why it is so important to know the valuation of the vehicle that the Insurance can make us.

 

In general, the value that the insurer gives to a car after a total loss is calculated based mainly on the age of the vehicle at the time of the accident.

The details of the valuation of the vehicle in an accident are established in the conditions of the contract, although insurers generally apply the following valuations to the car, depending on the circumstances:

  • The value to new
  • Venal value
  • The replacement or market value
  • The improved venal value

 

When the  Auto Insurance applies the value to new in the calculation of compensation after a total loss , it is valuing the vehicle for an amount equal to the cost of a new car with the same characteristics and including all taxes (VAT and registration). 

In addition, if we have declared in the policy the accessories of the car that are not standard or these are included in the policy, they will also be included in the compensation in case of loss of the vehicle.

If the car in question is no longer manufactured, the Insurance must indemnify the amount corresponding to the equivalent model that replaces it. In addition, this payment can be made in money or with a new car. 

 

The insurer applies the venal value to a car that is totally sinister in an accident, when it occurs after a period of time from its registration that is established in the policy.

 When valuing the car at the market value , the Insurance applies the sale value of a vehicle with the same characteristics and age, at the time of the loss. We talk about model and year, regardless of other aspects such as mileage or vehicle maintenance. 

In this case, non-standard accessories are also included if they were described in the policy. There is also an improved market value, in which some insurers increase the market value of the car by a percentage of their compensation.

In order to calculate the venal value of the car , it is normal for the insurance company to take as a reference tables that are published each year in the BOE with the valuation of hundreds of more or less old car models. These tables show the value in euros of the vehicles, according to cylinder capacity, year, horsepower, etc.  

 

In this case, the purchase price of a car with the same characteristics and age as the damaged car is applied. As in the venal value, it does not matter the kilometers that you have or if the car is more or less careful, and non-standard accessories can be included if they are included in the policy.

 

The difference between venal value and replacement value is important. What a car is worth for sale is not the same as the purchase price of the same car, although it may seem like a simple play on words.

In fact, the difference between one price and another can be between 20% and 30%, since the replacement cost includes transfer costs, arrangements and the seller's profit.

 

There are Car Insurances that in the conditions of the contract give the total sinister car an improved venal value , provided that certain circumstances are met. 

The improved value is significantly higher than the venal value alone, since in this case the expert also takes into account the prices and characteristics of the second-hand market, which means that the improved venal value is always higher.

In these cases, in addition, the compensation for the damaged car is calculated by adding to the value a percentage that is determined in the clauses of the policy.

 

The policy conditions must establish the type of value that the insurer will give to the vehicle in the event of total loss. In most cases, the age of the vehicle will determine what type of value the company insures that car for.

Each insurer applies these valuations according to their insurance offer, although as a general rule, cars with less than two years are offered compensation, in the event of a claim, according to the new or replacement value. 

If the vehicle is between two and four years old, we can find compensation according to the improved market value in a percentage that is usually specified in the contract. Of course, the total loss of a car with more than five years is usually compensated according to the venal value. 

That said, each car can have an ideal Insurance that offers better coverage for less money. Finding it is the challenge that we set ourselves daily in our online insurance comparator , where you can insure your cheapest car with the leading insurers.