Motorists warned about inadequate insurance
By: Click4Reg Team
Last updated: 27 June 2014
Itís been revealed that due to significant gains in the value of some cars, many motorists may be underinsured. Over the past few years, classic cars, in particular, have noted rocketing valuations. With this in mind, owners of these cars, many of whom have also invested in personalised number plates, may need to reassess their insurance needs. This will ensure that should a claim be required, they wonít receive a sum thatís only a fraction of the true valuation.
The worrying scenario has come to light after one manís Porsche shot up in price from a mere £8,000 to £80,000. Over the past few years, the prices of classic cars have been gaining rapidly, and in a relatively short period of time many motors might be worth tens of thousands more than they were originally. Unfortunately, thereís little anyone can do when a claim is put in and the payout is just a fraction of what the vehicle was actually worth. As a result, those in the insurance industry are suggesting that classic cars are revalued every year at minimum.
Darren Campbell, the owner of a Porsche 911S was shocked to discover the real value of his car. The Surrey-based motor engineer picked up the car 18 years ago for the price of £8,000 and has kept the beautiful vehicle in pristine condition ever since. However, he recently discovered the new market value was £80,000; ten-fold what he originally paid. As a result, his insurance cover needs to be far higher than he mightíve expected.
Gerry Bucke, an expert in the motor insurance sector, said, ďWe reviewed our classic car portfolio, and noticed that a number of our customers had declared values that looked very low in todays market. Some of the cars have almost doubled in value since the ownerís last valuation, and underinsurance works on classic car insurance Ė where the premium is partly calculated based on the value Ė in a similar way to home insurance. So owners could end up only receiving a percentage of the carís true value.Ē
But it isnít only obvious classics that are in danger of being undervalued. The 1960ís Bentley Continental Flying Spur has seen its value rise from £50,000 to £115,000 over the past decade; not a surprising feat for such a car. However, even some of the early Fiat 500s are expected to have risen significantly in their value, meaning that all owners of older cars need to check their insurance levels.