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How does agreed value car insurance work?

When you take out agreed value car insurance, you agree on the value of your vehicle with your insurer, and the car is insured for this amount. The alternative to agreed value is market value, which is based on your car’s worth and depreciated value when you make a claim.

The agreed value is the most you can claim in the event of a total write off. If you don’t have agreed value car insurance, then your maximum possible payout for a write-off will roughly be the resale value of the car at the time of the accident. Compare how agreed value coverage works and when you might need it.

Compare agreed value comprehensive car insurance policies

Name Product Roadside assistance New car protection Available states
Included free
Yes, cars under 2 years old
All 50 states
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
Liberty Mutual
Yes, cars under 1 year old & 15,000 miles
All 50 states
Car insurance through Liberty Mutual will give coverage options for almost any situation.
Root offers simple, affordable insurance that’s ideal for good drivers. Try the Root app for 2 weeks and see how much you could save. Available in 20 states.
Yes, cars under 1 year old & 15,000 miles
All states except AK, DE, HI, MT, NH, VT, WY
Esurance offers a modern online and mobile experience that helps you take your insurance on the go. Available in 42 states.
Yes, cars under 1 year old & 15,000 miles
Drive less than 30 miles a day? Save on the coverage you need with pay-per-mile insurance from Metromile. Get a low monthly rate then pay just a few cents per mile. Available in CA, IL, NJ, OR, PA, VA and WA.
All 50 states
USAA offers affordable car insurance with highly rated customer service to millions of military members and their families. Only available to military members, veterans and affiliated military members.

Compare up to 4 providers

What are the features of agreed value coverage?

The most you can claim with an agreed value policy is the amount you decided on before taking out or renewing the policy. This sum is listed on your insurance certificate and is up to you. Typically, you can only adjust it at policy renewal time.

The maximum amount you can claim from a market value policy is only calculated when you actually make a claim. It is determined by your car’s make, model, age and condition. is not listed on your insurance certificate and you have little control over it.

  • You get to choose how much your car is worth, rather than letting the insurer decide.
  • A higher agreed value will lead to higher premiums, while selecting market value, or a lower agreed value, can reduce your premiums.
  • Agreed value can be applied to almost any car, while market value is more suited to standard consumer models.
  • Exclusions, and all the usual car insurance terms and conditions will still apply. Just because you’ve paid for a higher agreed value doesn’t mean you’ll necessarily be able to claim it.

Up in flames

John had spent nearly 15 years restoring a classic Mercedes 2026 S which he kept parked in an exterior shed of his property. John had the car insured under agreed value cover for $90,000. Late one evening, John awoke to see the garage up in flames from his bedroom window. By the time local firefighters had arrived all that was left of the garage and car were mounds of ash and scrap metal.

The insurance company declared the vehicle to be a total loss. As the vehicle is outside of the 2 year replacement , John is paid the agreed value of $90,000.

When is agreed value insurance better?

Agreed value is easy to find, but is generally the less common option and may not be available from all car insurance providers. And some specialist car insurers will only offer agreed value policies.

  • Modified cars. Aftermarket extras and modifications can raise the value of a vehicle well beyond its apparent sticker price. The easiest way to get cover for any modifications can be to calculate their value and add this into the car insurance sum insured.
  • Vintage and antique cars. The market value calculation of antique cars will typically be way too low. With agreed value you can find a level of cover that more properly captures the rarity and additional value of the car.
  • Luxury and high-power cars. High-end, high-powered and luxury cars, including just about any supercar, will usually be more effectively covered by agreed value. These are not typical vehicles, and depreciation won’t usually apply at normal rates.
  • Cars under finance. If you still owe money on your car loan, agreed value means you can insure the outstanding loan as well as the actual vehicle. This can be invaluable in the event of a serious accident, so you won’t end up owing more than you get paid out by a claim if your car is totalled.
  • Imported vehicles. A car that’s not normally available will not necessarily have a defined retail value, in which case agreed value would be your best bet.

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Not sure if agreed value is right for you? Compare the pros and cons


  • You can claim the full, agreed-upon value of your car in the event of an accident.
  • You can get cover for almost any vehicle, including rare, modified or valuable cars.
  • The insured value of the car is fixed and will not change unduly.
  • You can choose a lower agreed value to save money on premiums, although the amount you are covered for will be reduced.


  • Agreed value car insurance is usually the more expensive option.
  • You may end up over-insured and pay for more cover than you need, or under-insured and without adequate protection.
  • Agreed value is not always available. Sometimes it may only be an option with comprehensive cover, and some insurers don’t offer it at all.
  • Sub-limits restrict the amount you can claim for certain items in the policy. For example, your policy might specify a maximum of $500 for broken glass claims, and $1,000 total for all modifications.
  • If your car changes in value, you’ll need to check your coverage at renewal time.

How much should I insure my car for?

Try asking yourself some of these questions when deciding on an agreed value.

  • What type of car insurance am I getting? If you’re looking for agreed value, you’re probably getting it with comprehensive cover.

Check whether your policy counts comprehensive extras claims, such as for roadside assistance, towards your agreed value sum insured. If so, it might be a good idea to choose an agreed value slightly higher than the total value of the car. This means your policy has enough cover to also pay for roadside assistance, towing costs and other comprehensive car insurance features. The right sum insured depends on the type of policy you’re getting.

  • How much will it cost to completely replace the car? If you’re having trouble working out how much your car is “worth”, it can help to instead think of how much it would cost to completely replace the vehicle in the same state as it is in now.

A good comprehensive car insurance policy should cover these costs entirely. However, it depends on your finances. Your car’s uniqueness might preclude market value cover, but your budget might preclude purchasing cover for all potential costs.

How much does agreed value car insurance cost?

The cost of premiums is typically dependent on a range of factors:

  • The car’s year, make and model. More common and popular cars, and those that are cheaper to repair, are generally cheaper to insure. The same is true of models with spare parts that are easily accessible, and that have a manufacturer repair network in the US.
  • Your location. Riskier areas incur higher premiums. Similarly, parking your car on the street instead of in a garage can also raise the risk levels, and therefore your premiums.
  • Security measures. Microdotting, car alarms, garage alarms, immobilisers and other security systems can reduce the cost of insurance.
  • Age. Older drivers over the age of 50, as well as younger drivers under 25, can expect to pay more for insurance.
  • Modifications and extras. Market value policies can include specific approved manufacturer and aftermarket extras to factor into the value of the car, like added safety features. With agreed value car insurance, you can include any modification, like a custom paint job or performance-affecting modifications.

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