Recently, my friend sold his motorbike and he shipped it using uship to the buyer. My friend took an insurance of $6500 for this shipment. When the bike arrived at the buyers location, the motorbike fell on its left side and made a small dent to the tank of the bike. The buyer requested to claim the insurance for the repairs. By contacting the bmw Motorrad for the quote, they said, the whole tank needs to be replaced and gave an estimate of $3400 for the replacement with the labor charges. When he submitted the quote as part of the claim, the following is what they sent.
Underwriters have concluded their investigation of the above-referenced matter and are prepared to offer settlement based on the following calculation:
(Insured Value $6,500 & Invoice Value $11,385).
Repairs Amount $3,984.44 x Insured Value $6,500 / Invoice Value $11,385 (averaged out from all 4 kelly blue book price ranges) >=$2,274.82 - $500 Deductible = Total Claim Payment - $1,774.82
If found in agreement with this calculation, please sign the attached release. Send the signed release back to our office and payment will be requested.
What’s up with that calculation ? I assumed if you insure it for $6500, if the quote shows $3500, why would they just give $2274 (I understand the deductible) . Could anyone shed some light on this ?
Is this how insurance works?