policy, your total-loss payout is based on the value agreed upon by you and your insurer at the start of your policy rather than your car’s actual cash value. It’s a great option if you own a classic, custom, or otherwise high-value car.

How agreed value car insurance works

Your agreed value policy will usually begin with a vehicle appraisal, statement of value, and/or other documentation to prove your car’s value. Through this process, you and your car insurance company agree on the amount they will cover the car for in the event of a total loss.

Once your agreed value is set, it is not affected by depreciation—if you file a claim for a covered loss, you’re entitled to a payout up to the full “agreed value” of your car. For instance, if you purchase a policy with an agreed amount of $50,000 for your classic car, and it is destroyed in a flood, you will receive a $50,000 payout, minus any deductibles.

Do you need an agreed value policy?

Most drivers do not need an agreed value policy. Agreed-value policies are meant to protect high-value vehicles, and they’re not available for every car.

That being said, check out the pros and cons of agreed value insurance:

Pros of agreed value car insurance

Beneficial for owners of expensive, modified, classic, or antique vehicles

Can cover your vehicle for a lot of money

You don’t have to worry about depreciation

Cons of agreed value car insurance

Only covers specific makes and models

Only covers

low-mileage vehicles

(not daily drivers)

Only covers you if you can guarantee vehicle parking in a private and secure location, like a garage

High premiums

Can be difficult to find a car insurance company that offers it

If you’d prefer to simply keep your rates low and your vehicle decently protected, you may be better served by a stated-value car insurance policy, which covers the stated value of the car or the

actual cash value (ACV)

Agreed value car insurance vs. stated value car insurance

While stated value insurance shares similarities with agreed value insurance, these policies differ in how the vehicle’s value is determined.

Agreed value insurance	Stated value insurance
Establishes the maximum pay-out amount based on the agreed-upon value of your car. Any claims filed ensure reimbursement up to the full amount.	Covers either the car’s “stated” or actual cash value (ACV)—whichever is less. The stated amount is what you say your car is worth at the time you take out the policy.

The main difference is that a stated value policy does not ensure a maximum payout. If the stated value of your car exceeds its market value, you may end up receiving a payout for your car’s ACV rather than its stated value in the event of a claim.

Of the two, agreed value insurance offers a higher level of protection—making it a safer bet for high-value and collector vehicles.

Agreed and stated value car insurance vs. standard insurance policies

A standard insurance policy will reimburse you for your vehicle’s actual cash value. The actual cash value of your car refers to the value of your car plus depreciation.

The best car insurance companies for agreed value car insurance

Most car insurance companies that offer agreed-value policies are specialized providers, such as American Collectors, American Modern,

Grundy

, Hagerty, and Heacock Classic Insurance.

However, big car insurance companies, including

Safeco

State Farm

, and

GEICO

, also sell agreed value car insurance policies. If a car insurance company offers

classic car insurance

, they probably sell agreed value car insurance.

Some larger companies also partner with specialized providers, such as Hagerty, which allows you access to different types of coverage, including agreed value car insurance.

The cost of an agreed value car insurance policy

An agreed value insurance policy typically costs more than a standard policy. This is because the payout in agreed-value policies is not affected by factors like the age or depreciation of the vehicle. Instead, the coverage is determined based on the mutually agreed-upon value of the car.

In other words, agreed value insurance premiums are more expensive because they cost insurance companies more money.

Given the potential cost implications, it’s worthwhile to take the time to shop for quotes.

How to get agreed value coverage

To get agreed value coverage, follow these steps:

Identify some insurance companies that offer agreed value coverage and ask for

quotes

Compare the quotes and coverage options from the insurance companies you approached.

Apply for the policy that is the best fit for you.

Gather any documentation or photos that your car insurance provider requires and submit them.

Pay for your coverage.

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FAQ

Is agreed value coverage expensive?

Agreed value insurance policies typically cost more than standard auto policies as they ensure a greater amount of protection for high-value vehicles. Unfortunately, there is no “average” cost for agreed value insurance—the fixed amount for your policy is based on the valuation of your vehicle.

What is an agreed value car insurance policy used for?

Agreed value car insurance stands apart from other auto insurance policies due to its unique coverage of the vehicle's full value. This type of insurance is commonly chosen by car owners who possess high-value, customized, classic, or collector cars.

Are agreed value and guaranteed value the same thing?

Yes. Agreed value insurance—which is sometimes called guaranteed value insurance—offers a fixed amount of coverage for specialty and collectible vehicles. This sets it apart from more traditional types of insurance coverage that determine payout amounts only when a claim is filed, based on factors like depreciation and market value.

Does agreed value insurance have a deductible?

Yes. If you file a claim with your insurance provider, you’ll need to pay your deductible before the insurance company will pay anything out.

Is agreed value the same as replacement cost?

No. In the event of a total loss, agreed value insurance will pay out an amount that has been agreed upon by the insurance company and policyholder. Replacement cost covers the amount of money required to replace a totaled car with a car that is the same model, year, and make.

Meet our experts

Hillary Kobayashi

Hillary Kobayashi is an insurance writer and editor specializing in insurance and finance topics. Hillary’s mission is to use her knowledge and love of education to help car owners better understand how they can save time and money on car ownership. The articles Hillary has published for Jerry span topics from state-specific bill of sale requirements to SR-22 insurance information.

Prior to joining Jerry, Hillary spent over ten years in education at Pacific University and the University of Oregon.

Sarah Gray

Licensed Insurance Agent — Expert Insurance Writer and Editor

Sarah Gray is an insurance writer with nearly a decade of experience in publishing and writing. Sarah specializes in writing articles that educate car owners and buyers on the full scope of car ownership—from shopping for and buying a new car to scrapping one that’s breathed its last and everything in between. Sarah has authored over 1,500 articles for Jerry on topics ranging from first-time buyer programs to how to get a salvage title for a totaled car.

Prior to joining Jerry, Sarah was a full-time professor of English literature and composition with multiple academic writing publications.