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What's the difference between market value and amount covered?
9 August 2024
Whether you’re buying a new car or one that’s been ‘pre-loved’, navigating insurance can be tricky. If you’re shopping around or making a claim, you probably have a bunch of questions about car insurance.
Getting a few of them answered and understanding things like the difference between market value and amount covered might help you be more confident when deciding to insure your vehicle.
Market value: How much am I getting?
When researching car insurance options, you may come across the term ‘market value’. This just means the amount that the market would pay for the car at the time of the incident, considering various factors including the car’s:
- age
- make
- model
- kilometres travelled, and
- general condition.
Market value also includes the costs of unexpired registration, and Compulsory Third Party (CTP) or Motor Accident Injuries (MAI) Insurance.
It doesn’t factor in stamp duty, transfer fees, dealer warranty or delivery costs.
At Suncorp we offer you ways to insure your car, with 'market value' or 'amount covered' options for insuring your car. Market value cover is an optional cover which is available for Suncorp Comprehensive and Comprehensive Extras Car Insurance.
If you want, you can set a specific 'amount covered'. Don’t get scared off by the jargon - it refers to the ‘amount covered‘ shown on your Certificate of Insurance. This is the maximum amount we will pay for your car in an incident (a total loss), unless we say otherwise in your policy.
Alternatively, you can choose to insure for market value rather than a specific amount, if we agree. Except for the terms of this optional cover, the cover provided by your policy otherwise remains the same.
Either way, this amount includes any accessories and modifications that are fitted to your car. It also includes unexpired registration and compulsory third party (CTP) or motor accident injuries (MAI) insurance, and GST.
To work out the market value we may use recognised industry publications to assist us to calculate the value of the car.
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.
If you select market value cover, it cannot be removed from the policy during the period of insurance. This option will show on your Certificate of Insurance. In the event of claim, your car’s market value will be determined at the time of loss.
See your Product Disclosure Statement for more info, including any deductions that may apply.
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Amount covered: Locking in the price
While market value does some of the heavy lifting when it comes to deciding on what you'd reasonably pay for your car, amount covered locks in a pre-determined amount your car is worth at the time of your policy renewal.
Amount covered is more of a specialised offering and allows you to have a discussion with your insurer to come up with an amount covered, which may or may not neccesarily be the actual market value. There are usually caveats to that too.
For example, insurers aren't going to let you insure your 1999 Toyota Camry for $60,000 because your car isn't worth that much. They could be more likely to agree to $2,000 for the Toyota Camry. And by comparison, the market value of the car may be somewhere below that dollar figure. So with this mind, amount covered is not a common insurance option in Australia and it can affect your premium costs more than market value agreements.
Get the right cover for your vehicle
Everybody’s needs are different when buying car insurance. So it’s important to weigh up the pros and cons for of different types of car insurance.
You may want to think about whether you’re insured for the right amount to ideally get back what you put in.
Choosing Comprehensive Car Insurance – the ‘bells and whistles’ cover against accidental loss or damage – is something that can put you back in the drivers’ seat if things go wrong. It’s also helpful to think about Roadside Assistance or windscreen and window glass cover too.
When you get a quote for Comprehensive Car Insurance with Suncorp you can choose to insure for 'market value’, or you can choose the amount.
We’ll provide you with a dollar figure where you can adjust the amount to any number in that range. This will then be the amount we’ll pay for an insured event, minus any fees and charges. Find the right car insurance for you with an online quote today!
Read more:
- What are the different types of car excess?
- Take the quiz: How well do you know Australian drivers?
- How to make a claim after a minor car accident
Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Information provided is general advice only and has been prepared without taking into account any person's particular objectives, financial situation or needs. Please read the relevant Product Disclosure Statement before making any decision regarding this product. Suncorp Roadside Assist is provided by Digicall Assist Pty Ltd. For full coverage details, please see the Suncorp Insurance Roadside Assist Terms and Conditions.
