There are many factors to be considered for determining the premium rates for an auto insurance policy. One such factor is the vehicle value. Most of the people are not sure of how an auto insurance company determines the vehicle values.
The insurance companies employ many different factors when coming to determining the car’s values to determine the policy rates as well as to determine the payout for accidents or theft claims. If you had an accident in the Indianapolis area, you might need a good check out one of many good Indiana car accident lawyers to help you.
The main point to start with when determining the vehicle values is what is called the Kelly Blue Book. This book is a guide for all trade-in, private party and retail vehicle values. The book considers many factors to determine the vehicle values like make, year, model, sub model, mileage, condition options and many more. The auto insurance companies normally use the retail values of the vehicles for insurance purposes. But this is just the starting point and this will be adjusted or fine-tuned later. There are many circumstances where the policy holders are offered less than the expected values and this needs to effectively renegotiate the vehicle values.
Kelley Blue Book values are used as such by some insurance companies to determine the auto insurance quotes. The value of the vehicle is very important and the hook for many insurers since the more expensive a vehicle is, the higher the premium will be in general. It is again very important to understand that while purchasing a full coverage or physical damage to the vehicle (protecting one’s own vehicle), in case of a total loss, the insurer will pay only the assessed value of the vehicle and not which is owed towards the financed loan of your vehicle. This will certainly leave the policy holder to pay the interest to the lending entity out of his own pocket.
To avoid this, there is something called GAP coverage which has been designed to pay the entire difference or balance amount between the insurance pay out and the interest on the loan. This is generally provided on request alone. It can be requested via the finance company and this is inexpensive (about $20 per month – very cheap indeed).
You may need to avoid another situation while purchasing liability coverage alone, since this may end up in incurring a total loss to the vehicle. This will pay very less for the insured car and in case there is still some amount owed on the vehicle, it is considered under debt. This will result in the insured paying the balance of the loan amount obtained for your own vehicle.
Purchase of a comprehensive and collision coverage for your vehicle which has salvage value is highly recommended. To find the company which offers the coverage with the lowest rates, just complete a simple form online in an auto insurance website and this allows you to compare the quotes of multiple companies. Since it is competition in any business, it is a win situation for you to choose the best suitable one for your needs.