Agreed value vs market value Car Insurance

What is agreed value Car Insurance?

In short, insuring your car for ‘agreed value’ means you agree with your insurer on what value your car will be covered for in the event of a total loss claim. This agreed sum generally stands until the policy is due for renewal.

What is market value Car Insurance?

If you insure your car for ‘market value’, then your car is generally covered for the market value of the car at the time of a total loss claim. An assessor will usually estimate the car’s value at the time of the claim. Factors such as condition, age, make and model can be taken into account to arrive at a payout figure.

How you can choose between agreed value or market value

Both have advantages and disadvantages.

Here are a few pointers which may help you decide between the two options:

Market value:

In some cases, market value Car Insurance tends to be cheaper

• So, market value insurance could save you money when you take out a policy.
• You know in case of a total loss claim your vehicle will generally be assessed based on it’s condition, age, make and model tat the time of a claim.
• Therefore, market value Car Insurance could help you replace your car with a similar model of a similar age at the time of the claim.

Agreed value:

• In some cases, agreed value insurance can be more expensive.
• It can cost you more when you take out the policy.
• In the event of a total loss claim, you will generally recover the amount agreed from the time you took out the policy.
• Therefore, you may be able to replace your car with a similar model and age of your car.

In summary

It’s important to check the Product Disclosure Statement before you decide on a policy as this has information about policy features, inclusions and exclusions. Some people may decide to take out market value policies because they’re generally more affordable, however others may prefer the greater certainty offered by an agreed value policy.

Compare, select and save on Car Insurance with iSelect.

Use our free comparison service to compare Car Insurance policies from our range of providers online, or call our friendly team on 13 19 20.

Last updated: 08/09/2021