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- When To Start Your Car Insurance
- Car Insurance Information
- How Car Insurance Premiums Are Calculated
- Types of Car Insurance
- Comprehensive Vs. Third Party
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- Agreed Vs. Market Value
- Find The Best Car Insurance
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- Car Insurance Terminology
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- Add A Learner Driver To Your Car Insurance
- Car Insurance For Young Drivers
Agreed Vs. Market Value Car Insurance
Most insurers will also give you the option of market or agreed value in the event that your car is written off.
- Market value represents the market value of the car at the time of the claim, taking into account the condition of the car based on its age, make and model.
- Agreed value is the value of the car as agreed by both you and the insurer and is fixed until the policy renewal date.
Before you adjust your seat, turn on the radio and drive away, it’s important to understand some of the finer details of car insurance – particularly how your car is valued should anything happen to it.
So below you will find a quick crash course that will clear up any confusion surrounding two common types of insurance currently available to consumers.
First up is “agreed value”. In the event of a write off, the insurer will pay the dollar amount shown on the policy
What’s the Difference?
To give this a bit of context, here is a quick example:
A vehicle with an agreed value of $30,000 has been written off.
The policy will pay out $30,000.
So what about “market value”?
A market value policy is directly tied to what an assessor thinks a car is worth at the time of the claim. Some of the factors that determine a payout may be the condition of the car, its age, as well as make and model.
So let’s now take our example from last time and apply the same rules in the situation below.
A car with a market value policy has been written off. There’s no fixed agreed value in this case.
After the accident, the insurance company decides the payout amount once they have investigated the current market value of the car.
Both have advantages and disadvantages depending on your financial situation and will have different impacts on the amount that you pay for your car insurance.
Find out more about car insurance and what best suits your needs using our car insurance comparison tool.
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iSelect General Pty Limited ABN 90 131 798 126, AFS Licence Number: 334115. Any advice provided by iSelect is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice we give you, having regard to your personal situation, before acting on our advice or purchasing any product. You should consider iSelect’s Financial Services Guide which provides information about our services and your rights as a client of iSelect. We receive commission for each product sold.