Paid verses Book price?

[Bper]

When applying for insurance on used cars you are asked to put down the value of the car, If purchased  from a dealer this will obviously bump up the value as the car is sold with a profit. However in the event of a write off they will only pay the book value which will include any depreciation .

So why is it necessary to put the paid value and not the book . Would doing this help to possibly lower the cars insurance premium.  Now the insurance companies say you must put down what you paid for the car or it could invalidate any claims. If they are only going to payout on book price why is this paid value required. 

[Roy124]

If you bought at a below market price and then claimed at market price you would have benefitted from the difference. 

OTOH the insurance should put you back on the same position as before. 

I know my SiL argued that the insurer pay the value of the loss where he lived in the North of Scotland rather than the much lower price available in the south of England unless they paid his costs for travel and subsistence to that car.  I believe he got the local price. 

[FROSTYBALLS]

Insurers will already have up to date details on the current trade values, etc, so don't need that information, and if customers just gave trade values for quotes, presumably pay outs will be lower.

Depending on condition of the car, etc, insurers should pay market value which is somewhere between trade price and retail.

Sometimes negotiation is required if the car is low mileage, exceptional condition, etc. We never leave the car's folder (containing service detai!s, etc) in the car as that information can be used in negotiation. If the car is written off, the insurer may want some of this information anyway.

[Cyker]

I also never understood why some insurers they wanted you to put that info in either, as they don't use it as far as I can tell! It certainly seems to have zero effect on the quote or anything, as they always use the market value of the car anyway...

[Markyswan]

I saw this post and as my car insurance is due in a few weeks , I also was thought why you have to quote the price you paid if the insurance bods only pay what the book price is. Hope someone can explain this to me as well.

[Cyker]

I fear it will remain one of those eternal mysteries, like why I have a higher tax bill than billionaires