Why Do You Need a Car Appraisal Before Getting Insurance?

In many cases, an insurance company will require an inspection and appraisal before issuing an auto insurance policy. There are several reasons for a car appraisal.

Definition

A car appraisal is a determination of the car's market value at the time an auto insurance policy is written. It may also include a visual inspection of the vehicle.

Purpose

An insurance company uses a car appraisal to determine how much it will likely pay the policyholder if the vehicle is damaged or destroyed.

Vehicle Condition

A visual inspection and appraisal will give the insurance company an idea of the vehicle's condition. This helps the insurance company avoid paying for damage that existed before the policy's inception.

Custom Equipment

An appraisal will also tell the insurance company about any custom equipment on the vehicle, such as chrome wheels, high-end stereo equipment or window tinting. These features factor into the market value of the car.

Effect on Premiums

An appraisal helps keep overall premiums low, because it allows the insurance company to properly assess each risk that it assumes.