How do I get a valuation for my agreed value insurance policy renewal?

A valuation based only on inspecting a set of photos provided by a classic car owner is not a way of providing a reliable valuation of a classic car, but clearly a number of insurers, faced with rising values for even mainstream classic cars like MGBs and derivatives, have decided to use photo evidence and self valuation by the owner with a review by an "in-house expert" as their agreed value procedure. But it seems likely they have done that to avoid the requirement of a written valuation from a specialist carrying out the necessary inspection of the vehicle.

In a very competitive classic car insurance market, simplifying the valuation evidence process for the customer, avoiding the inconvenience and cost for customers of getting written valuations from specialists and avoiding a heavy workload for the broker and insurer in processing written valuations are clearly major considerations.

Marketing classic car insurance is based on promoting a good quality service as a broker or insurer, offering a good scope of cover in the policy, having simple procedures for taking out or renewing a policy and offering competitive premiums. So for the important agreed value feature of the policy a competitive offer has to simplify the process to a good set of photos and an agreed value proposed by the vehicle owner which are then reviewed by an in-house classic car valuation expert. Clearly the expert will have mystic powers!
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Posted: 160401
With rising classic car values over the last 18 to 24 months, many MGV8 enthusiasts are prudently checking the agreed value they have on their classic car policy to ensure they are not underinsured. Up to modest values many insurers have been prepared to accept self-valuations from the policyholder supported by a set of photos. Several members have been in touch recently enquiring whether the V8 Register is able to provide valuations. The simple answer is that as a matter of policy the V8 Register has not offered an MGV8 valuation service for members or other enthusiasts.
The reasoning is a classic car valuation is a serious document forming part of an owner's insurance contract with the insurer. Our concern is that if the valuation is put to a test following a serious claim, then the qualifications of the valuer could become an issue investigated by the insurer or his assessor, notwithstanding the insurer had accepted the valuation provided by a valuation document for the agreed value part of a an agreed value policy. To be able to value a particular classic car model you need a close knowledge of the market and market values and a good knowledge of the model and the condition classes. You also need to make a physical inspection. The resourcing needed for a valuation service to meet a even a modest demand of say 5 valuations a week (250pa) would need a team of volunteer valuers with sufficient market and technical knowledge around the UK and the logistics (time involved and cost of either the volunteer valuer travelling to inspect a car or the owner driving to see the volunteer valuer) would be a major concern over the viability and sustainability of such a scheme.

What form of valuation do insurers require?
For mainstream classic cars like an MGB or an MGV8, most insurers offering limited mileage agreed value policies have for many years accepted self-valuations supported by a set of photos of the car when taking out or renewing a classic car insurance policy. A few had required a written valuation from a specialist based on a physical inspection of the vehicle. Now with good MGV8s valued at over £15,000 it seems many of the leading insurers operating in a competitive marketplace are developing their valuations systems and have chosen to use a process where a detailed set of photos has to be part of the customer's application together with their self-valuation and then the insurer has an in-house expert who checks the photos and values proposed by the customer. For example a leading broker Adrian Flux says on its website "when applying for an agreed value policy it is important to include high quality photos to ensure we can process the application quickly. At Adrian Flux we know it's important for drivers to get the real, current value for their car should they have an accident. Your photos help us to assess the vehicle's condition and make sure you get the right value if anything happens. As part of any agreed value policy we will need to see high quality photos of your vehicle. The work and care that people put into cars can often save them from depreciation, and sometimes actually increase the value of a car. Having photos of your car ensures that any modifications or customisations are documented, meaning we can give you an accurate value for your vehicle". They then explain how to take a good quality and comprehensive set of photos. You can see their agreed value advice on the Adrian Flux website. Link

Beware the scrappage buy back surprise
In December 2012 the Federation of British Historic Vehicle Clubs (FBHVC) reported in its newsletter that it had been making enquiries into cases where specialist classic car insurers have amended their policies regarding salvage rights in the event of a total write off but appear to be using terms that apply to modern vehicle accident conditions. The situation with classic cars is different because, depending on the loss category, many owners of historic vehicles would quite understandably be unhappy to see their cherished vehicle declared a write-off and crushed when several of the body panels, interior trim or mechanical components could be salvaged and reused to good and safe advantage. In cases where the costs of repair of major damage may exceed the agreed insurance value the cars are considered uneconomic repair cases by the insurer and are classed as a Category C, but many classic car owners faced with that situation might prefer to rebuild the damaged car. People close to the classic car insurance market will often concede that how scrappage is handled in various classic car policies is a "subject which can be grey" but then typically add "where it is permissible for the vehicle or parts to be returned to the client, the insurer will always endeavour to do so. They add there will usually be a fair charge for the scrap value which is deducted from the agreed value payable on a major claim". See our article in December 2012. Link

Take care not have your car under insured
Hopefully our popular PriceWatch series on market information and the news items on MGV8 price trends seen in the market will alert fellow members to the need to avoid underinsuring their MGV8. When an insurer accepts an "agreed value" that is usually the market value of the car. There is also the reinstatement value including the cost of repairing a classic car with substantial damage to its previous condition. That cost can very easily exceed the agreed value in the policy. Where the cost of repair exceeds the agreed market value then there are real concerns the insurer, on paying out the full value in the policy, may then declare the car a write off and then claim the ownership of the scrap, inviting the policyholder to buy it back! Many policyholders may not be aware of that condition may apply in their policy. On that basis the policyholder could end up with a net payout of less that the insured amount! So do read the policy document with great care! See our article