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Re: Merecedes SLS AMG (prices)
nberry:
I am curious, if the value of the car is doubled as a result of taxes what do you insure the car for? Is the value MSRP less depreciation or total cost less depreciation?
Just ask yourself what the insurance company would have to pay out to replace your car if it was totalled.
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fritz
Re: Merecedes SLS AMG (prices)
The question is whether the insurance company would included various taxes which can double the price of the car in determining value. Obviously, if that is the case your premium would also be double.
If they claim the value is MSRP as actually value then premium would be much lower.
What happens if you have some hayseed paying 50% over sticker for a car. Is the insurance required to participate in his folly and pay him the 50% premium without prior contractual agreement? Does this not lend itself to fraudulent activity?
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Re: Merecedes SLS AMG (prices)
In motor insurance there no agreed sum insured like in property insurance. The amount is defined as the "insured's estimate of value" and on the basis of this amount the insurance premium is calculated. So if you wrongly inflate your estimate you just pay more without any benefit at the time of compensation.
In the case of a loss event the insurance assessor checks whether this estimate is adequate or not. Adequacy means if this amount is above or below or equal to the market value of the vehicle. What you get compensated for is the actual market value provided that your estimate is not below that amount. The taxes are inherent part of cost and hence of the value of the vehicle. Also, if when new the car carried a premium over sticker and a say week later it is totaled and it is verified that you cannot find cars on the market without paying this extra then you get compensated provided your estimate included this extra. If next year the market does not accept any "over sticker" then you have to adjust your estimate because otherwise you'd pay more to the insurance company but you would be just compensated for the current market value.
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"Form follows function"
Re: Merecedes SLS AMG (prices)
here we insure cars at invoice including import duty.
so if the total cost is 300k we insure for 300k and th premium accordingly.
surely the premium is tripl of what it would be on a 100k but then again you get paid the total value in case of totl loss.
parts are also highly taxated.
on another note, if you insure a classic car in the USA for example. it's insured at estimated value. i.e few hundred k to millions of $.
and not on the base of it being a 1950's car that has a worth of 1500 $ after depreciation........
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Speed has never killed anyone, suddenly becoming stationary... That's what gets you.
Re: Merecedes SLS AMG (prices)
The key to insurance compensation is the "value at the time of the loss". The insurance company should not put you in a worse or better position monetarily than you were just before the event. The operative figure is what the car would have fetched on the market one second before the loss event.
So a classic that could be proven to fetch say $2 million at the auction could be insured for and compensated for that amount.
If you insured your 300K car for 300k in the first year and never adjusted the value, it doesn't mean that if it is lost in year 4 you would get 300k to replace it. What you get is the actual market value of your 4 year old car at that time. In the meantime you have overpaid for insuring at a higher value without any benefit come compensation time.
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"Form follows function"
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