Most people don't know what they mean when they ask for "full coverage" when they buy insurance. What's going wrong? "Full coverage" is not a real thing. Everyone needs to know what their coverage is, but if you drive a Mercedes, BMW, Bentley, Rolls-Royce, Porsche, Viper, Ferrari, Lamborghini, Lotus, or Aston Martin, you need to know it more than anyone else.
If you drive an expensive, exotic, or high-performance car, you'll want to make sure that if you get in an accident, you'll be able to...
Most people don't know what they mean when they ask for "full coverage" when they buy insurance. What's going wrong? "Full coverage" is not a real thing. Everyone needs to know what their coverage is, but if you drive a Mercedes, BMW, Bentley, Rolls-Royce, Porsche, Viper, Ferrari, Lamborghini, Lotus, or Aston Martin, you need to know it more than anyone else.
If you drive an expensive, exotic, or high-performance car, you will want to make sure that after an accident, you get OEM parts, OEM paint, the ability to fix your car at the auto body shop of your choice, and the amount of money needed for the repair.
If you fix a pricey car with non-OEM parts and/or bad work, the car's value will go down significantly. When it comes to expensive cars, even a good repair will lower their value. What does "decreased value" mean? It is the decrease in a car's market value after it has been fixed. A Porsche or Ferrari, for example, will be worth less after an accident, even if it is fixed properly. See http://www.hurt911.org/accident/car-accident-car-value.html for more information on lost value.
You don't want to fight with your insurance company over whether or not your car can be fixed or should be written off as a total loss. Most of the time, your insurance company will want to fix your car, even if you think it should be written off. Most insurance policies only cover "actual cash value," which means that if your insurance company agrees that your car is a total loss, you will only get a payment based on the current replacement cost of your car, less the amount it has lost in value (the decrease in the value of your car due to use, deterioration and the passage of time).
"Agreed value" or "stated value" is the best way to replace a high-priced or exotic car if it is totaled. Chubb and MetLife are the only insurance companies I've found that offer agreed-to-value insurance.
On the Chubb website, it says: "You and Chubb can come to an agreement on a price and lock it in for a year. That's the exact amount you'll get if your car is stolen or destroyed in a covered loss. Don't worry about the "book" value. Even the deductible is on us. No haggling, no depreciation, no deductible, no problem."
MetLife's website says that Equivalent New Automobile Replacement for Total Loss is available for vehicles within the first year or the first 15,000 miles, whichever comes first.
What's the difference between MetLife's "Equivalent New Automobile Replacement" coverage and Chubb's "Agreed Value Option"? When it comes to high-value cars, Chubb is the clear winner. Chubb offers its agreed value coverage every year, and every time the policy is renewed, the agreed value is changed. From what I've seen, the adjusted agreed value is still much higher than the real value, even after years and more than 100,000 miles. Chubb also offers up to $1 million in underinsured coverage, which is also very important. Make sure to ask your Chubb agent how much-underinsured coverage you can get.
MetLife is a good choice for average-priced new cars. MetLife's Equivalent New Automobile Replacement coverage is no longer available after the first year or 15,000 miles. This is still a good deal for most people who just bought a new car since people often wreck their new cars soon after buying them. Most of the time, just driving a car out of the showroom can cost up to $10,000.
