Insurance jargon can be quite hard to comprehend especially if the topic or situation is new to you. Insurance terminology denotes a certain meaning or value. Car owners often get confused with the difference between market value and the amount covered. If you are to insure your car, it is essential to know basic insurance terminologies so you can choose the best bundle or insurance program for your vehicle. If you are to buy insurance for your car, it is essential to know how much coverage you get from your bundle and if it is the ideal one for your driving behaviour, type of car, and your car’s current market value.
What’s is Amount Covered?
The amount covered basically means the amount your car is insured for. It means, in case of damage, loss, or accident, it will be the amount you will get from your insurer. Depending on the insurance company you are under, the amount covered also include the value of accessories you added into your car and other modification you have done to enhance its performance.
In some insurance companies, the amount covered is referred to as the agreed value which is typically the amount you agreed upon with your insurer. The agreed value or amount covered can either be lower than your car’s market value or higher. You have the option to choose which car insurance policy to opt for depending on how you assess your driving activities and behaviour. Thus, before deciding on the agreed value for your vehicle, make sure you will not be at loss in case of accidents.
What is Market Value?
There are many factors insurers look at when assessing your car’s market value. Your car’s model, trim, safety features, age mileage, and upgrades are the most common aspects used to calculate a car’s market value. Some insurers use recognised industry publications to help determine and give a concrete and exact market value of your car, Market value is the term used when selling your vehicle in an open market. Some will even check if you have a first aid kit, like this one: https://firstaidworks.com.au/product/modular-first-aid-kit/
If you are to choose to adjust your car’s amount covered or stick with your given market value, there are also other aspects to look at. The amount you are willing to pay for your car insurance premium, the age of your vehicle, the replacement value of your car, and the likes will help you decide whether or not your car’s value is less or higher than what is being calculated.
There are many other terms that leave most car insurance clients in a head spin especially if you are a newbie. However, if you are to get your car insured, it is vital to have a thorough understanding of the system, terms, and other important factors that will save you from a total loss. Moreover, it is also equally important to assess your driving behaviour, skills, and activities to know the level of coverage ideal for you and your car’s current condition.