Quote:
Originally Posted by pozza
I had the same thing happening to me with APIA as well, every year my agreed value would drop but my premium would increase. Strangely enough though my car was written off as a total loss a couple weeks back and they paid me out $1,300 more than my agreed value. Go figure
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When looking at your agreed value and the cost of your policy you need to remember the agreed value of the car is a very small part of a premium.
When a insurance company calculate a premium, two main factors come into play. The cost of an average claim for your type of car and the cost of claims in your postcode for the same type of car.
The insurance company does not need to factor in a huge amount for a total loss as the percentage for total loss claims is very small compared to the number of claims lodged. This is why the agreed value on a car can drop but a premium will increase.
When looking at repairing a car for a bumper bar for example, the bumper bar will cost more to buy each year, the cost of paint will be more expensive each year and the cost of the panel beater to pay the employee to fix the car will increase each year. So each year the average cost to repair a car increase.