KNOW IN TIME

Sun (Auckland), Volume II, Issue 420, 31 July 1928, Page 7

KNOW IN TIME

INSURING YOUR CAR REPLACEMENT VALUE On becoming possessed of a motor-car the owner naturally in- | sures it, and is under the impres- | sion that he is fully protected, but whether his insurance is going to give him the fullest protection and value is quite a different story. Often insurance policies are couched in language as intricate to the layman as that of a lawyer’s draft, and one may be quite certain that insurance companies, like banks, do not take many, if any, needless risks of losing their money. There are several rather misleading things in insurance policies that should be made quite clear before deciding the policy, to be taken out. Many people are under the impression, for instance, that if they have insured a ' car for a certain total sum, say £300.! £SOO. or more, in the event of total! loss or damage the insurance company | will pay the full amount stated in j policy. But unless special care has been taken to arrange this matter when the policy is first taken out, or subsequently at renewal time, it will probably be found not to be the case at all. The insurance company usually promises to pay what they call the “replacement value” of the car. This would not be much hardship if the term really implied what it usually does to the average person; that is to say, the amount for which one could buy a car similar in all respects to one’s own car in regard to make, horsepower, condition, style, age and so i forth. But this is not what it means. I What most insurance companies call i “replacement value” is the price at which one can sell the car in question second-hand. Thus a certain 1923 touring car that was bought, for £305, the current price of the year when new, is quoted v in the second-hand lists for this year at £lls which will be the amount paid as replacement value against the £3GS or a trifle less, that most people would expect to receive, since that figure appears on the policy, and the insurance premium they have been paying ach year is partly based on that value. If this is the case the wording in the policy will read something like this, "... the company may repair or replace the said car or any part thereof or pay to the insured its reasonable market value at the time of such loss or damage, but the value as stated in the schedule hereto shall be the maximum amount payable by the company in respect of loss of or damage to the said car and its accessories.” The best step to take to prevent one thus feeling dissatisfied in event of total loss (and ear thieves are becoming more numerous daily), is to get the amount of the replacement value agreed on in advance and to have it inserted plainly in the policy, so that there can be no doubt or dispute about the matter later. Each year at the renewal of the policy this amount would be adjusted to allow for depreciation. and so forth. Insurance companies know exactly where they stand in respect to their policies and exactly what they are liable for, but how often is it that the insured person also knows —unless it is when it* is to.© lat.e.