The difference between Market Value and Agreed Value

A common question when investigating comprehensive car insurance is: What is the difference between an Agreed Value policy and a Market Value policy?

Under a comprehensive car insurance policy, you are provided protection for events like fire, theft, storm or collision. If your car is damaged and the cost to repair it would exceed the car’s value, the insurer will typically declare it a total loss or ‘write it off’.

This is where the difference in Market and Agreed Value comes to the fore.

What is Market Value car insurance?
Market value, which is the most common cover, is the cost to replace your vehicle with one of the same make, model, age and condition as your vehicle immediately prior to the loss or damage.

If your car is written off or stolen and is insured at market value, then the value of your car will be determined based on a number of factors including:

  • car dealer guides and recent car sales
  • the pre-accident condition of your car
  • the kilometres travelled.

What is Agreed value car insurance?
Agreed value is a fixed amount that your insurer is prepared to offer as a settlement, should your car be stolen or written off.

This amount is locked in annually, either from the date you buy a new policy, or from the date your policy was renewed. The value of the insured vehicle in Agreed Value policies is detailed in the policy schedule.

Which option should I choose?
As with all insurance, it certainly pays to do your homework and think about what level of cover you really need for your vehicle.

Some important considerations include:

  • Your vehicle’s age, make and model, and what the cost would be to replace your lost vehicle, exactly as it was
  • Your financial situation, as Agreed Value policies do generally feature a higher annual premium cost

As with all insurance policies, it’s important that you read the Product Disclosure Statement to make sure you understand the differences in your policy and how it is going to be calculated in the event of a claim, including the impact of any excess and unpaid premium.

If in doubt about the details of your current car insurance policy, it is best to ask someone from your insurance company.

If you have any questions about your comprehensive car insurance policy with National Seniors Insurance or would like to get a free competitive quote, please call our team on 1300 50 50 99.


Disclaimer: the information above is general guidance and does not take into account your personal circumstances, financial situation or needs. Please discuss your unique insurance requirements with an insurance company prior to purchasing a policy.

Featured Article

View more articles on: