Agreed Value Car Insurance vs Stated Value Insurance

Bundle & Save



Currently insured?

Agreed value car insurance is a policy where you and the insurer agree on the value of the covered vehicle. The item is guaranteed to be insured up to that fixed amount if you need to make a claim.

Since agreed value insurance covers the full value of the property, it's commonly used to insure an expensive, modified or classic vehicle. An agreed value policy offers extra protection, because the age and depreciation of a car won't result in a lower payout, which happens with most car insurance policies.

This additional value comes at a cost. Quotes for agreed value insurance are typically higher than for a standard policy, and you'll need to have the car appraised before purchasing coverage.

What is agreed value insurance?

Agreed value insurance policies have a maximum payout that is agreed on by both the insured and the insurer when the policy is purchased. In the case of damage or an accident, the maximum payout is that agreed-on value.

To determine the agreed value, owners usually have to have the insured item appraised and submit that value to the insurance company. The insurer may conduct its own assessment as well.

Agreed value insurance is often used for classic and collector cars, which don't have a specific value or can be hard to assess. Some specialty insurers already have their own set values for various vehicles, meaning there's no need for an appraisal in those cases. A few factors play into opting for an agreed value policy for your car:

  • Price: The vehicle does not have a traditional blue book value, or that value does not represent the car's worth.
  • Repairs: Fixing a classic vehicle can require a more specialized mechanic to return the vehicle to its original state, which a standard insurance policy is unlikely to cover.
  • Change in value: Most cars lose value as they age, owing to wear and tear, but the value of rare vehicles may fluctuate more unpredictably. Agreed value allows you to lock in the value of your car at the time you're purchasing the insurance.

The cost of an agreed value policy isn't just based on vehicle and driver characteristics. Each insurance company will set its own terms and conditions, some of which are nonnegotiable. In the case of classic cars, common limits include:

  • Mileage: Insurance companies can put a cap on the total miles allowed to be driven in a year. On the flip side, your insurer may offer a discount if you agree to drive even fewer miles.
  • Use: Driving only for pleasure or for show, rather than commuting, lowers the cost of a policy.
  • Storage: Keeping your high-value vehicle in a private garage, a barn or some other secured storage can also lower your rates. And some companies, such as Geico, won't extend coverage if the vehicle is stored in a public place.

Should you get agreed value insurance?

Consider agreed value insurance for items and vehicles with a value that is both high and hard to pin down. By guaranteeing coverage at the agreed value, this type of policy sidesteps any concerns that the insurance company will value the item differently than you would.

Reasons to get agreed value coverage

  • The item is expensive and hard to replace.
  • You want to protect the value of your property at a guaranteed amount.
  • You don't want the insured property to lose value as it ages.
  • You don't mind paying more for that security.

Standard auto insurance policies factor in depreciation, because vehicles usually lose value with age. But some situations simply buck that trend. For example, say you recently purchased a 1957 Chevy Bel Air and had its value appraised at $50,000.

If you know there are relatively few of these on the market and that their prices can vary significantly, you might want to consider an agreed value policy, which would cover the vehicle for up to that $50,000 figure in repairs or replacement if the car is damaged.

Agreed value vs. stated value insurance

Agreed value insurance sets the maximum coverage at the agreed-on number between the insurance company and the insured person. Stated value insurance covers whichever is lower: the agreed value (which is also sometimes called stated value) or the actual cash value. The actual cash value is the cost to replace the item in its current condition (the depreciated value) and is sometimes called the market value.

Agreed value
Stated value
AdvantagesHigher total coverage, because it is tied to the appraised value of an itemMore affordable
DisadvantagesPolicies are usually more expensiveChance of lower payouts, because the insurance company pays the lesser of two valuations

The key difference is that with a stated value policy, you might not get that agreed-on number, even if you provided an appraisal up front. For a high-value or specialty car, agreed value insurance has benefits over a stated value policy, as it provides greater peace of mind in the event of a claim. If you do consider buying stated value insurance, review the terms and coverage carefully to ensure the policy meets your needs.

Agreed value vs. actual cash value

Actual cash value does not give you the full replacement cost for an insured item but its depreciated cost — the value of the item, which has reduced with age. Most auto insurance policies use actual cash value. Agreed value takes into account neither the replacement cost nor the age, only the amount agreed on at the start of the policy.

Agreed value maximum payout
Actual cash value maximum payout
Does not decline with age of vehicleLessens with depreciation
Replacement cost does not matterBased on replacement cost, minus depreciation, for a total loss
Set at start of policyChanges during life of policy

Who offers agreed value and classic car insurance?

Most of the agreed value auto insurance offerings come from specialty companies that focus on classic, collector and modified vehicles.

One company, Hagerty, markets its agreed value car insurance policies as Guaranteed Value. However, some of the largest insurance companies also offer classic car policies, so you may be able to bundle your coverage.

Mileage limit
Regular use allowed
Min. Age of car
American CollectorsYesNoNone
Geico (through Assurant)YesNoNone
State FarmYesNo20 years

The cost of agreed value insurance is usually higher than the cost of a standard policy. Rates are based on a wide range of factors, from the value of your vehicle to where it's usually parked. The cost also varies significantly between insurers. For example, quotes for a 1969 Dodge Charger — a more common classic car — with an appraised value of $73,000 and a 6,000-mile annual limit ranged from $492 to $1,425.

To find the best deal, compare quotes from multiple companies before purchasing coverage.

Agreed value insurance for jewelry, antiques and commercial property

In addition to high-value cars, agreed value policies can be used for a number of other valuables, including jewelry, rare musical instruments, antiques and even buildings.

For commercial buildings, an agreed value policy can be a way to avoid coinsurance, which forces policyholders to share a portion of the risk if they insure less than the full value of a building. Agreed value policies lock in the building's total value, making coinsurance unnecessary.

Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.