
Sign up & start saving!
Get our weekly newsletter for the latest in money news, credit card offers + more ways to save
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Updated
One of the many decisions you’ll encounter when picking a car insurance policy is whether you should insure your vehicle for an agreed value or for its market value.
The value you decide upon is the sum insured, which is the total amount of cover you have. This amount will affect when your car is written off, repaired or replaced under the terms of your insurance policy.
If you are involved in an accident and the cost of your repairs is more than the sum insured, your car will be written off and you can claim the total value of the sum insured to spend on a new car, or not, as desired. If you’re in an accident and the cost of repairs is less than the sum insured, your car insurance will cover the cost of the repairs.
Market value or actual cash value (ACV) is the default, what your payout will typically be unless you’ve selected agreed value. Actual cash value is the cost to replace it based on how much your car is worth today, which is its original purchase price minus any depreciation.
So if your car was $30,000 brand new but now it’s only worth $20,000 after depreciation, with actual cash value, you’d only get $20,000 to replace it. With agreed value, you can set an amount your car is worth to you, say $30,000, and get that amount paid back if your car is totaled.
Discover coverage that’s broader than competitors, valuable discounts up to 30% off and perks like shrinking deductibles that reward no claims.
The right policy for you depends on your situation and you should always consider the benefits and drawbacks of each policy in line with your own needs. However, if you’re having trouble deciding, try considering the following situations:
Agreed value policies typically cost more for a few reasons:
Cost is the biggest difference between market and agreed value. Agreed value can be worth it to protect expensive cars from depreciation or being underinsured, but for most standard cars, it’s not usually worth it.
Pros
Cons
Pros
Cons
Compare car insurance companies near you.
Your information is secure.
Learn cost-sharing terms to find out how much you’ll really pay for healthcare.
This fintech just branched out into low-cost life insurance — but its lineup is limited.
Find unusually low face values for a whole life policy, ideal for supplemental insurance.
Get pet insurance that reimburses 100% of your vet bills or a separate wellness plan.
Compare the costs, coverage and eligibility of these two popular plans.
Use your death benefits to help pay for medical expenses while you’re still alive.
Learn which short- and long-term add-ons are free and why others might be worth the extra cost.
Plus, 2 you can’t.
Smart strategies that homeowners can use to get rid of Private Mortgage Insurance (PMI).
A new change to the tax code quietly went into effect on January 1, lowering the minimum interest rate for permanent life insurance policies.