In most countries where several insurance companies do business, there is a so-called “blue book,” which is a catalogue of all types of vehicles, classified per model year, with their respective market values. This is to prevent bickering and discord among the insurance companies when, say, a car insured by Farmers collides with and totals an auto insured by Allstate. Sometimes blue books are the product of an agreement between insurance companies, and sometimes they are issued by the insurance regulator.
In Costa Rica, where competition in insurance is quite recent, there is no official blue book to establish the values of vehicles for insurance purposes. The onus is on the client to establish the value, which should be based on market value – in Costa Rica, of course. If you didn’t recently buy the car, there are several ways to go:
1. Check classified ads and see what cars similar to yours are going for, then shave off a tad (people always ask for more than they are expecting to receive, eh?) and use that.
2. Call up your friendly dealer. A lot of people use this system, but I don’t trust it; I suspect that when dealers think you are going to trade in your car, they appraise low, but if they learn that you simply want to know the market value, they “bid” high, to make it appear that their product does not depreciate quickly.
3. The website www.crautos.com incorporates an unofficial blue book. As it supposedly has several thousand used vehicles on offer and boasts a huge volume of vehicles bought and sold, I think this website is the best bet.
Try to get the value of the car reasonably correct. If you insure too high, you’re throwing premium money down the drain. If, for example, your car were stolen, it would be the insurance company’s option to pay you or to replace the car with one just the same as the one that was lost – so they would replace the car, and you would have been paying extra premium on the surplus value.
If you insure lower than market, in the case of a claim they would pay for the stolen car based on the insured value. When an underinsured car has an accident, insurance companies pay for the repair based on the same percentage of the market value. In other words, for example, if you insure your car at 70 percent of market and you have an accident, only 70 percent of the repair will be paid.
It is important to note that our insurance companies do not adjust the insured value on auto policies year by year to reflect depreciation; it is up to the client to request a revaluation and recalculation. If your insurance broker is worth his salt, he should remind you every year or so.
The opinions and viewpoints expressed are those of the writer. Our purpose is to give the reader a better understanding of insurance in Costa Rica. For more information, contact David Garrett at 2233-9520 or [email protected].