Agreed value car insurance

Agreed value car insurance

Agreed value is a sum insured that is fixed by agreement between the insurer and the vehicle owner. Agreed value involves the car owner and their insurer agreeing on a specific value for the insured vehicle when the policy is taken out. For old cars the agreed value is generally negotiated based on general industry guidelines. Deciding which approach to take is a personal decision. An insurance policy using an agreed value will likely have higher premiums than one using market value, however non-standard vehicles could benefit from this extra cost. The most important thing to remember is to always read your policy documents and weigh up all the pros and cons, financial or otherwise, of both choices, because only you can decide how to best value your car. Generally cars with custom modifications have potentially had the most to gain from agreed value car insurance option.
When you insure your car comprehensively, its agreed value is set at the beginning of each period of cover. It is based on the fair value given then for your car’s make and model in the motor trades most commonly accepted price handbook. The value doesn’t change for the period of cover. Almost all cars depreciate with age and use, so the agreed value offered each time your policy becomes due for renewal, almost always will be lower than the year before.

What is the difference between 'Agreed Value' and 'Market Value'?
Agreed value is a sum insured that is fixed by agreement between the insurer and the vehicle owner.
Whereas,
Market Value is the amount of money it would cost to replace your vehicle in your local area with the same make and model at the time of a total loss. We will take into account the condition of your vehicle.

So "Agreed Value Car Insurance" or "Market Value Car Insurance" for you?
Market value car insurance is a widely recognized car insurance term for what a car would fetch on the open market.
Market value is set by the automobile industry standards and is used to value newer cars.

The agreed value of your car is the agreed-upon amount that has been set between you and the insurer.
Agreed value is used for classic cars, collectible cars, race cars and customized automobiles. If you own one of these types of vehicles agreed value car insurance can be your best friend.
Agreed value car insurance does not depreciate as does market value car insurance. Most insurance companies require that your car must be older than a set number of years such as fifteen or twenty-five in order to qualify for agreed value car insurance but there are some insurers out there that will allow late model car owners the right to buy agreed value car insurance if they have heavily modified and/or customized their vehicles. Most insurers agree that cars covered with agreed value insurance cannot be used for commercial transportation and they also stipulate that you must own at least one other vehicle that you use for daily driving.
With agreed value car insurance, you are guaranteed in writing the amount you will receive if your car is stolen or wrecked. Be sure that you and your agent are at total agreement with one another over the agreed upon value at the time the policy is written. If the market value of your car changes during the policy, the agreed amount can be changed by endorsement.
It is quite easy to determine the actual, true value of your car when buying agreed value car insurance. There are many price guide print publications available and resources online to use. If you own a highly customized car, it could be a bit trickier to set a value so be sure to keep receipts and records for work done on the vehicle. You could hire a professional appraiser to help set the value of your customized vehicle if you and your insurer cannot agree.
Agreed value car insurance is the perfect option if you own a rare car of any kind. Be sure to do a lot of comparison shopping when looking for an appropriate policy because insurance companies vary greatly in regards to stipulations attached to this type of policy.

http://www.insurancebuffs.com/agreed-value-car-insurance.html
http://www.aami.com.au/customer-service/help-topics/car/agreed-value
http://autos.aol.com/article/insurance-standard-vs-agreed-value/
http://www.strattonfinance.com.au/insurance/learn/articles/agreed-vs-market-value-car-insurance.aspx
http://www.consumer.org.nz/reports/car-insurance/key-decisions
http://www.moneybuddy.com.au/car-loans/insurance-valuing-your-car.html