It may not be brand new, but I really like it!
The reasons for insuring a new vehicle or asset are the same as those for insuring a used one. And the same laws also apply to both. Insurance for used goods is therefore similar in many respects to that for your new assets. The game-changing difference is the value of the good you’ve acquired, and that raises a few questions.
How will the value of my used good be assessed?
In the case of cars and motorcycles, 20% of value is lost as soon as the vehicle leaves the dealership. The longer they’re on the road, the more value they lose. In the event of an accident where your vehicle is considered a total loss, standard insurance will pay the current value. This will inevitably be less than your purchase price. To avoid depreciation, you could take out replacement insurance.
For a boat, even pre-owned, your insurer will offer coverage tailored to your needs. The value of the boat will depend on the model and the inspection, as well as any repairs or improvements. Please note that all repairs or improvements must be backed up by valid documentation. Basic insurance also covers you for any damage caused to others on board or outside your boat.
However, for some goods, replacement insurance is not available. After 5 to 7 years, depending on the coverage, it is no longer possible to purchase replacement value insurance for automobiles. Instead, the agreed value (determined when the insurance contract is signed) will apply. For watercraft, the purchase value is guaranteed.
When it comes to personal property or homes, replacement value is the most important factor. This means that in the event of a claim, it’s important to determine the value of your losses. The claims adjuster will base his/her decision on this information. IBC offers an effective tool for making an exact inventory of your assets.
In any case, it’s always important to be cautious when buying second-hand. Don’t hesitate to ask for the original purchase documents and proof of all repairs. These papers could prove useful when your insurer assesses and calculates the cost of repair or complete replacement of your item.
Insuring used goods: is it always better to opt for replacement insurance?
This will depend on the value of the goods, as well as your tolerance to risk.
Let’s say your property is a total loss. Without replacement insurance, your insurer will compensate you based on market value. Depreciation will be considered. But replacement insurance will make up the difference by reimbursing you for almost the full balance, preventing you from losing a lot of money. Isn’t that what we all want when we buy insurance for used goods?
We’ll be happy to answer any questions you may have!
