Did you know that most automobile insurance policies follow conventional wisdom in valuing your car? A standard market value is assumed but then depreciates quickly. The value goes down almost 20% as soon as the vehicle leaves the dealer’s lot and then it is reduced by approximately 10-15% each year. Other factors are also considered such as make, model, and mileage. This means that after an accident, the policy may not cover the actual worth of your car, much less the cost to replace it. 
Does this make sense in today’s market with new and used car prices so high? Do all vehicles depreciate at the same rate? Are some cars different such as classic, high performing, or luxury cars?
Research shows that certain luxury and high performing vehicles do hold their value including Ferrari, Mercedes, Porsche and McLaren. Classic and antique cars are another category that don’t always depreciate like a regular car. Perhaps not so surprising, supply chain issues are affecting inventory and causing new and used car prices to spike and depreciate at different rates.
Many of our carriers have options for insuring luxury, high-performance and classic cars. These includes Agreed Value where you and the carrier agree on the value in advance. That is the amount you will be paid if the car is totaled in an accident. You can change the value annually at renewal.
Another option is Stated Value which lets for you to state the value, based on supporting documentation. The insurance company will then pay the lesser of the stated value or the actual cash value.
Knowing the value of your car is an important step in making sure you have the insurance you need.