How Important is the Fair Market Vehicle Value?
A vehicle's Actual Cash Value (ACV) or Fair Market Value is used by most auto insurers to establish the value of a vehicle at the time of a loss. Understanding the actual cash value of your car is simple: take the cost of the vehicle and subtract the depreciation.
There are several sources available to help you determine the Actual Cash Value of your vehicle, including:
- Kelley Blue Book www.kbb.com
- NADA Guides www.nadaguides.com
- Edmunds www.edmunds.com
How Our Insurers Determine Your Vehicle's Fair Market Value at the Time of a Covered Loss:
Chubb uses the private party value from Kelley Blue Book:
The Company's total liability for Property Damage or Total Theft shall be limited to the actual value of the vehicle at the time of the occurrence, which may not exceed the amount stated on the policy. For the purpose hereof, the actual value of the vehicle at the time of the occurrence, will be determined according to the Private Party Value from the Kelley Blue Book.El Aguila uses the private party value from Kelly Blue Book:
For the purpose hereof, the actual value of the vehicle at the time of the occurrence, will be determined according to the Private Party Value from the Kelley Blue Book.GNP Seguros uses the Actual Cash Value of the vehicle:
In the event of total loss or total theft of the insured vehicle, the Company shall have the option of replacing the vehicle to the satisfaction of the Insured or of effecting a cash settlement for the actual cash value on the vehicle, on the date of the loss, not exceeding the insured amount.While it does not specify, in practice, GNP uses the Kelley Blue Book Private Party Value to determine the Actual Cash Value of insured vehicles.
Questions Regarding Vehicle Value
What happens if I owe more than the actual cash value of my car?
If you're upside-down on a vehicle loan or owe more than the vehicle is worth, you'll probably have to pay for a higher limit of insurance to match the amount owed to the financial institution to satisfy the lender requirements. What's important to understand is that the insurance company typically will only pay up to the current market value, not the higher limit that the lender is requiring the insured to purchase. However, all of Mexpro's premium full coverage insurance policies include Gap coverage, which pays an addition 15% above the fair market value of the vehicle.
What happens if I under-insure my vehicle?
Simply put, under-insuring means choosing a limit of coverage that is less than actual cash value of your car. There are two consequences of under-insuring a vehicle. The first is insufficient funds from your policy to replace your vehicle in the event of a total loss. The second is possibly being unable to repair your car in the event of a partial loss. This goes back to why you should always take the time to calculate an accurate value of their vehicle before purchasing a Mexico tourist car insurance policy.
What happens if I choose to over-insure my vehicle?
Over-insuring your vehicle will make your tourist car insurance policy more expensive than it needs to be. In the event of an accident, partial loss or total loss, the insurance companies will only pay up to the actual cash value of your vehicle. Even if you choose to pay more, you will only be covered for the value of your car.
What if my vehicle has aftermarket modifications or accessories?
If you purchase a Mexico tourist car insurance policy from Mexpro, coverage will apply to most common vehicle makes and models with original manufacturer equipment. Your policy's terms and conditions will go into greater detail, but our auto insurance is not ideally suited to offer additional coverage for vehicles with extensive aftermarket accessories added or with costly vehicle modifications.
Properly choosing your vehicle's current value on our quote forms is extremely important because it determines how much your Mexico tourist car insurance policy covers you in the event of theft or an accident. The best way to find the actual cash value is to get the Private Party Value from Kelley Blue Book.