What is the difference between market value and retail value in terms of insurance?

When people file accident or loss claims, insurance companies often calculate the market value of the item. They often take an average of the items resale and retail values to come up with a payout for the loss.

What Is The Seller Asking?

The retail value of an item is the price retailers might ask for the item. For example, when you start the search for a new car, you’ll note dealers list the retail value for their cars. This isn’t necessarily the price you must pay for the car, but it is the amount dealers believe they can get for their vehicles. It often includes a markup, or additional amounts the dealer adds on to make sure they get a profit.

What Can Sellers Charge?

Market value is the amount sellers can get away with charging. It includes considerations such as the item’s condition and resale value. Although sellers can charge any price they want, this value limits the amount they charge because there’s only but so much that customers will pay for a given item. To figure out a selling price for your home, you need to consider its location, repairs and prices other buyers paid for homes in the area. For example, selling prices for homes in Plano, TX, might be considerably different from one neighborhood to the next. You might pay higher prices for homes in Willow Bend Lakes than you would for homes in Park Forest.

Insuring Your Items

These values are important when you insure your valuables. Your premium payments depend on these amounts, and so does your loss payouts. You can visit our website to get instant quotes for your home or auto insurance policy. Compare these quotes to see the best option for you. You also can call our office. A representative can help make sure you select the best coverage for your possessions.