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.
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.
Both have advantages and disadvantages.
Here are a few pointers which may help you decide between the two options:
In some cases, market value Car Insurance tends to be cheaper
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.
Last updated: 08/09/2021