What’s the difference between amount covered and market value?

Insurance terminology can leave even the savviest shopper in a head-spin. And being unsure about what or how much you’re covered for is the last thing you want when you’re looking to insure your vehicle. We take a look at the difference between amount covered and market value, so when you get a car insurance quote or flick through policy documents, you’ll know what both terms mean and how they impact how much you’re covered for.

Amount covered

YWith GIO Car Insurance, your ‘amount covered’ is the amount your car is insured for. It is shown on your Certificate of Insurance. If you need to make a claim for loss or damage to your car, this is the most we will pay. The amount covered includes the value of accessories and modifications that are fitted to your car, unexpired registration, Compulsory Third Party (CTP) or Motor Accident Injuries (MAI) Insurance, and GST.

Some insurers may refer to agreed value, which is when the amount your car is covered for is adjusted and agreed upon by both you and the insurer. With GIO Car Insurance, you have the option to adjust the amount you would like to insure your car for – within a specified range – under your amount covered. Adjusting your amount covered will impact on your premium.

Market value

When researching your car insurance options, you may come across the term ‘market value’, which is a variable amount based on an assessment of how much the market would pay for the car at the time of the incident.

Market value cover is available for GIO Comprehensive Car Insurance. When we calculate the market value of your car, we include many factors such as the car’s:

• age
• make
• model
• kilometres travelled, and
• general condition.

Market value also includes the costs of unexpired registration, and CTP or MAI Insurance.

It doesn’t include stamp duty, transfer fees, dealer warranty or delivery costs.

We may also use recognised industry publications to assist in calculating the market value amount.

It’s important to understand that the market value of your car is not necessarily the same as the ‘for sale’ prices you might see offered for a similar car.

See your Product Disclosure Statement for more info, including any deductions that may apply.

Compare Car Insurance Options

Whether you choose to adjust your amount covered or stick with a market value amount will depend on several factors. Some of those factors to consider are:

• whether you’re trying to save on your car insurance premium
• the age of your car, and
• the determined replacement value of your car (you may believe your car is worth more, or less, than the determined amount due to its condition, service record etc).

IIf you’d like to know more about the amount covered on your car insurance policy, then get in touch with one of our knowledgeable insurance specialists today on 13 10 10. Alternatively if you’re exploring your car insurance options, get a Car Insurance quote online and protect what’s precious with GIO.

Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Any advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available.