What Does Agreed Value Car Insurance Have That Stated Value Insurance Doesn’t?

Your thinking about making some changes to your auto insurance. This has led to you finding out that the options are broader than you thought. Specifically, you’re wondering if opting for agreed value coverage is really that different from opting for the stated value coverage. Here are some of the ways that agreed value car insurance is different, and why it might be a good fit for you.

Agreed Value May Be More Expensive Than Stated Value

If you’re thinking that agreed value coverage may mean higher premiums than stated value, that is correct. In many cases, the premium is more costly. The point to remember is that policies of this type tend to be more direct and more precise in the type of benefits you can receive.

If you do want to keep the cost a little lower, there is the option of choosing to insure the car for less than the current market value. Before deciding if this is the way to go, compare a quote for stated value coverage versus agreed value coverage and see what you think would provide the most protection for the lowest price.

Agreed Value Locks in the Value Applied for the Entire Term

With agreed value, there is a guarantee that the figure that you and the insurance provider decide to use will remain in effect for the entire current term of the policy. That means if your term is for a full year, there will be no changes to that agreed value.

When it’s time to renew the policy for another term, both parties have the option of seeking to change the value. That means you can negotiate with the provider for a higher or lower value. At the same time, the provider can approach you with a suggestion for a change. If everything is till fine, it’s easy to leave the plan as is for another term. By contrast, the value in a stated value plan may be changed by the provider for the new term. Your only option is to decide whether to renew or make a switch to a different provider.

You Know What to Expect if a Covered Event Occurs With Agreed Value Coverage

If a covered event does happen and you have agreed value car insurance, there’s no question on what figure will be used for any payouts. It’s the one that you and the provider agreed to at the beginning of the term.

That’s not the case with stated value coverage. In the terms and conditions, there’s likely to be a clause that allows the provider to pay out based on actual cash value or the stated value. Typically, a provider will go with the option that is lower. You won’t know which one is applied until there’s a response to your claim.

Agreed Value is Better For Imported Classics

If you own an imported vehicle, especially one that’s classified as a classic or a sports vehicle, you may find that agreed value works better. That helps you to be covered in the event of any changes in market value. It also means that the process of determining the value is simpler. By having an appraisal done, you will know the amount to seek.

Stated value may not be the best option for these types of vehicles. You could end up with a lower amount from the beginning. There’s also the chance that the way any payouts for covered events are managed will result in less than you anticipated.

While agreed value coverage may not be the ideal fit for everyone, it pays to discuss this approach with your agent. Depending on the make, model, condition, and features of the vehicle, guaranteed or agreed value protections may be the best move you could make