Vehicle price for insurance

[sars3331]

hello i would like to inquire what should be vehicle price for insurance for second year ...car was bought 1 year ago for around 42 lacs now current price of new car is around 72......however what should be price at which car is insured ..given the fact on parts they will charge me 20 percent depreciation.
agent want to insure car at full price of new car where is mine is one year old

[mohsan87]

you have to insure at current market value as mentioned in the renewal notice which I received last week. it says

It is in your interest to revise the estimate value for which you wish to get insurance cover for your vehicle so that it corresponds to its current market value, otherwise in the event of claim the Company's liability for loss / damage to the vehicle will reduce proportionately.

considering above statement, in previous year when car was insured at lower than market value, my friend have to pay extra amount as "under market value insurance charges" along with depreciation ratio at time of claim.

so its best to insure at Current Market Value

[sars3331]

ok tahnks .
it was insured at invoice price .......at the time of insurance ....i am willing to increase the declared value but insurance agent want to value at price of current invoice price of new car....i mean after one year the are charging 20 % depreciation so should declare value at 80 percent of new car value ...

[mohsan87]

consider current market value of that specific model instead of new one's invoice price.

[capsat]

PW member @abid110 is the right person to guide

[abid110]

at time of claim, if your sum insured is found less than the prevailing market value of vehicle at that moment, your total claim will be reduced by the same proportion - this is called 'under insurance clause' which is in-built in every motor insurance policy. it is always in benefit of car owner to keep sum insured equivalent to market value. like if (God forbid) the car is totaled/snatched, insurance company will not pay a penny above 42 however the same make and model will be of 70+ at that time means you will have to buy a 1000cc vehicle now with that money. please go ahead with current market value.