Why do insurance companys ask how much you paid for your car?
Although you pay that premium.
Answers:
What one pays and what auto is worth is often not the same.
A new vehicle drops from bwt 3 and 5 thousand dollars in price after you purchase it.
Dealer gets highest possible sell price. most often far higher than replacement cost listed in blue book.
You may pay 25,000 for car but insurance covers only say 21,000
you lose 4,000 if you total it shortly after purchase.
Used vehicles are even worse.
You pay premiums on the insurance company listed value. not what you paid for it.
Of couse they want to know what you paid for it.
Just like if you borrow 10,000 dollars on a 100,000 dollar home -the finance company still will check home most often than not.
They are protecting their pocket not yours.
Just for records, the actual price of your vehicle doenst matter as far as inurance rates and premiums go.
I believe it because if you have an accident and write it off however much the car is worth they will never pay you more than you paid for it !!
In certain circumstances the car is of what is called "excess value" If the value is over the set amount for a particular insurance grouping it may attract an additional premium.
For example an Audi RS8 will be the same group as a Ferrari but a hugely different value.
if you live in hackney and drive a bentley , it will be more than having a reliant robin living in cambridge
Usually, the question is how much is the value of your car?
because if you crash it and it only cost you £200 in the first place, they can then write it off if the repairs will cost £400.
Just for details about your car, like colour and stuff. They normally pay out trade prices. Which are the lowest. Meanies.
Agree with others points, but I think they also want to check you aren't lying about modifications etc. They can gauge this by how much you pay/ value your car at and compare with market value
to know how much they have to refund you if something happens to the car.
They want loads of money
that's a really good question and i have ofton wondered the same. i don't know the answer and by reading the other answers neither does any one else
I get asked the value of the car, so if I changed my car insurance company next year then the value of the car drops
I don't think all of them do for you to get the policy. If the vehicle is stolen they will ask you that.
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