Is agreed value car insurance better for you? |
Get agreed value car insurance quotes online

Get agreed value car insurance quotes online

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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
Yes, cars under 1 year old & 15,000 miles
All 50 states
Included free
Included free
Yes, cars under 1 year old & 15,000 miles
All states except AK, DE, HI, MT, NH, VT, WY
Yes, cars under 1 year old & 15,000 miles

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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

Compare the pros and cons to decide if agreed value or market value is right for you.


  • 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?

When purchasing agreed value car insurance, you’ll want to 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. So while you want to make sure you have enough insurance to cover the cost to replace your car, if you insure your car for too high of a value, you could be wasting money unnecessarily.

    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.

    Bottom line

    If your car’s worth more than market value, you probably need to consider agreed value. Either way, by comparing your car insurance options, you can find the best deal for you.

    Frequently asked questions

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