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Agreed value car insurance is an option for drivers who wants protection for classic or luxury cars, but it’s not always worth it for every car. Consider getting quotes for agreed value car insurance if your ride is worth much more than the average car.
When you take out agreed value car insurance, you and your insurer are agreeing on the value of your vehicle. The car is then insured for that amount, which is the most you can claim in the event of a total write off. If you have standard or market value car insurance, your maximum possible payout for a write-off will be roughly the resale value of the car at the time of the accident.
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The most you can claim with an agreed value policy is the amount you decided on before taking out or renewing your policy. Typically, you can only adjust it at policy renewal time.
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 coverage 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 two year replacement , John is paid the agreed value of $90,000.
Agreed value isn’t always a common choice for car insurance. But there are some circumstances where you might benefit from this type of policy.
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Compare the pros and cons to decide if agreed value or market value is right for you.
When purchasing agreed value car insurance, strike a balance between how much it would cost to replace your car and how much you want to pay in premiums each month. The higher the agreed value, the higher your premiums.
Premiums vary and are typically based on several factors, such as:
If your car’s worth more than market value, you may want to consider agreed value insurance. Compare your car insurance options to see if it makes the most sense for your situation.
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What if I have an agreed value policy on my motor insurance and the car suffered a loss (not big but some) can the insurer cancel the policy or charge a new premium?
Hello Vero,
Thank you for your comment.
According to car insurers, an agreed value car insurance involves you, the car owner, and the insurer agreeing on a specific value for the insured vehicle when the policy is taken out.
In the event of a claim being made as a result of the car being declared a total loss, your insurance company will reimburse you the agreed amount. Hence, your insurer will pay you and you may renew your coverage. I suggest that you check this with your insurer.
It’s important that you read the eligibility criteria, features and details of the policy, as well as the relevant Product Disclosure Statement PDS/T&C’s of the policy before making a decision and consider whether the product is right for you.
Regards,
Jhezelyn