If you drive a public motor vehicle, your automobile is not just for commuting: a way to get to and from work. It's vital equipment that you rely on to earn money and maintain quality of life for you and your family, as well as bring grateful passengers across the areas of Papua New Guinea that you cover. Keeping your vehicle protected in case of accident, theft or other adverse events is especially important. PMV insurance allows you to safeguard it. Monthly payments that you can build into your budget and plan for allow you to repair or replace your PMV following a covered accident or incident.
In the world of motor vehicle insurance, agreed value is an interesting option to consider when selecting a policy and discussing terms and conditions with your insurer. Let's look at exactly what agreed value means in motor vehicle insurance policies and how it can potentially benefit you.
What is agreed value?
Agreed value means you and your insurance provider settle on a specific amount of money that will be paid out if your vehicle is stolen or involved in an accident where it is severely damaged or declared a total loss. Insurance comparison site Compare the Market pointed out that the major advantage of a PMV insurance policy that incorporates agreed value is clarity. You do not need to try to figure out the market value of your vehicle if it's stolen or written off as a total loss, or wait for your insurer to offer that information. Instead, you can more confidently and quickly start planning on how to replace your PMV and get back to work.
Another important consideration to keep in mind when it comes to agreed value is that the figure won't change over the course of your policy. While it will likely be updated when you begin your next policy agreement, the value is stable across each agreement. This is one of the key differences from market value, which can change on a very frequent basis.
How is agreed value different than market value?
Market value refers to the cost of replacing your vehicle at the time it is damaged, destroyed or stolen. Automotive site Motorversa explained that specific factors, like mileage and physical condition, will affect how market value for a specific motor vehicle is calculated.
Market value is a common insurance option for older cars because the monthly premium payments are generally lower than for policy that includes agreed value. This makes it a popular choice for older, lower-value cars, as depreciation tends to slow after a few years. However, there's more uncertainty about exactly how much your policy will pay out in the event of a covered claim.
Why can agreed value be a good choice for my PMV?
With an agreed value policy, you know your insurer will issue you a payment for a specific kina value following a covered claim. If your PMV is newer, especially reliable or includes modifications made to increase the number of passengers or amount of cargo you can safely carry, an agreed value policy can help you recover the full value you place on it if a serious accident or theft occurs. While your premiums will likely be higher than with a market value policy, you can count on the full agreed-upon value being provided when a claim is covered.
At Trans Pacific Assurance, we offer an agreed value option for our PMV insurance. Simply ask your agent to learn more about this valuable choice for keeping your PMV safe and secure.