Market value coverage pays out based on your car's estimated resale value at the time of a total loss claim, which naturally decreases as the vehicle ages and depreciates. Agreed value coverage, by contrast, locks in a fixed payout amount agreed with the insurer at the start of the policy, regardless of how much the car has depreciated by the time of a claim, and is typically available at a higher premium since it removes the depreciation risk from the policyholder.
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Frequently Asked Questions
Is agreed value coverage available for every vehicle?
It's more commonly offered for newer or higher-value vehicles, since insurers assess the specific car's condition and value before agreeing to fix a payout amount.
Does market value coverage cost less than agreed value?
Generally yes, since the insurer's payout risk decreases as the car's value naturally depreciates over the policy term.
How is the agreed value amount actually set at the start of a policy?
It's typically negotiated between the policyholder and insurer based on the vehicle's condition, market comparables, and sometimes an inspection, at the time the policy is issued.
Which option makes more sense for an older car?
Market value coverage is often more cost-effective for an older, lower-value car, since the gap between market and agreed value narrows as depreciation slows over time.
How can I compare agreed and market value policies?
Use the insurance comparison tool to see which insurers offer agreed value options and how the premiums compare.