At Compare.com, it’s our mission to find simple ways to help our customers save money on the things they need. While we partner with some of the companies and brands we talk about in our articles, all of our content is written and reviewed by our independent editorial team and never influenced by our partnerships. Learn about how we make money, review our editorial standards, and reference our data methodology to learn more about why you can trust Compare.com.
Updated December 8, 2023
If you own a collector or classic car, it pays to have the right car insurance policy in case your car is totaled after an accident.
Agreed value guarantees a payout based on what you and your insurer agree on when you take out your policy. Stated value means you determine your vehicle’s value, but your insurer can choose to pay the stated value or the actual cash value (ACV).
The difference between these two types of insurance could be thousands of dollars in coverage. Here’s what you need to know about agreed value vs. stated value to help you choose.
Save on Your Next Car Insurance Policy
An agreed-value policy (also called guaranteed value) is a special type of insurance for antique, classic, and collector cars — mainly from specialty insurers like Heacock Classic, Hagerty, Grundy, and American Modern. Before you purchase the insurance policy, you and the insurance company agree on your vehicle’s value.
Your insurer looks at documentation such as upgraded parts and restoration receipts, photos, and an appraisal to determine the value of your car. If you get into an accident that totals your car, you’ll receive the full agreed-upon value with no depreciation deduction, though a deductible may apply.
Agreed-value car insurance may be a good idea if:
Agreed-value coverage is typically reserved for specialty vehicles. Weighing the pros and cons can help you decide if it’s the best option.
| Pros: | Cons: |
|---|---|
| Depreciation isn’t a factor | More expensive premiums |
| Valuation is determined early, so there’s no surprise later on | You’re typically limited to occasional driving to shows and car meetings |
| Many specialty insurers offer unique coverages, like spare parts and memorabilia | Insurers often require the vehicle to be kept in a secure location when not in use |
The policyholder gets to determine the vehicle’s value on a stated-value insurance policy, which helps determine the insurance premium. But you may need to provide documentation to back up the value, similar to an agreed-value policy.
But unlike an agreed-value insurance policy, the insurance company decides during the claim process whether to pay the stated value or the fair market value, which factors in depreciation. That means the claim payout amount can vary and could be significantly less than the stated amount. A deductible may apply, which can further reduce your settlement offer.
In some cases, stated-value car insurance may be a better option than agreed-value coverage, like when:
Stated-value coverage is a good option for some people but may not be right for all antique cars and collectible vehicles. Consider the pros and cons to determine the kind of coverage to buy.
| Pros: | Cons: |
|---|---|
| Lower premiums | The total value is likely not reimbursable |
| Offered by many standard insurance companies | The insurance company will pay the lesser value if your car’s totaled. |
| Reimbursement is available up to the stated amount on the policy |
What’s the difference between stated value and actual cash value?
The actual cash value (ACV) of a vehicle is how much it’s worth today. It factors in the car’s original value and then subtracts depreciation. Standard auto insurance policies use ACV to determine repair costs and the totaled value after a car accident.
A stated-value policy is like an ACV policy, which doesn’t determine the settlement value in advance. But since you can prove the vehicle’s value in a stated-value policy, there’s a chance you’ll get a higher claim payout than if you insured the vehicle on a standard insurance policy.
Trying to figure out what type of coverage is best? Consider the following scenarios to help you choose between agreed-value and stated-value coverage.
Let’s say you have a restored classic vehicle appraised at $100,000. You and your insurer agree to the $100,000 value at the start of the policy. Months later, a tree falls on your car and totals it.
Since you have an agreed-value insurance policy with a $500 comprehensive deductible, the insurer cuts you a check for $99,500.
In this example, you have a regular vehicle that you can prove has a value of $30,000. The insurance company insures it for the stated amount. Not long after you insure it, you rear-end someone, totaling the car.
When you file a claim, your vehicle is valued at $20,000. Even though you have a stated-value policy for $30,000, the adjuster pays the current market value of $20,000 minus your $1,000 collision deductible. Your claim payout is $19,000.
You know you need vehicle insurance, but you’re unsure if classic auto insurance is worth it. Understanding how agreed-value and stated-value insurance work may help you decide.
The table below shows how agreed-value and stated-value policies differ.
| Agreed Value: | Stated Value: |
|---|---|
| Insured for the full amount, guaranteed payout if you file a claim | Insured for the stated amount, but the claim payout can be reduced by depreciation |
| Great for antique, collector, exotic, and classic cars | Great for modified vehicles or cars you didn’t pay the full value for |
| Typically only available through specialty auto insurance companies | Can be insured on a standard auto policy with a traditional insurer |
| Higher premiums to cover full compensation | Lower premiums that could result in a lower claim payout |
Knowing the difference between agreed-value vs. stated-value policies can help you determine which type of policy is right for you. We answered common questions on the topic below.
Agreed-value auto insurance is for specialty vehicles that have a higher worth than market value. This includes rare, antique, and collectible cars expected to rise in value, not depreciate. Agreed-value policies pay the full, agreed-upon value for repairs or total loss claim settlements.
Whether an agreed-value or actual cash value (ACV) policy is better depends on the vehicle type, its value, and the documentation you have to prove its worth. Antique, rare, or restored collector cars can be covered for their total agreed value on a more expensive policy. However, a less expensive market value policy may be a better fit for modified vehicles or less valuable vehicles.
A stated-value policy allows you to choose the vehicle’s insurance value. But the claims adjuster may only pay its actual cash value at the time of loss. However, the stated value may be a better choice since there’s a possibility you’ll get a higher payout than what a standard insurance policy would pay.
Classic car insurance provides agreed-upon value coverage, but a traditional policy only pays the vehicle’s fair market value after a covered loss. You can also typically include unique coverages on a classic car policy, such as coverage for parts and tools, automobilia, restoration, and auto show medical reimbursement.
Sources
Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She is a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications. She uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content to help readers make smarter insurance choices that have a positive effect on their budgets and finances.
Compare.com’s #1 goal is to save you money. We publish resources that are based on hard-hitting data and years of industry experience to help you make more informed decisions with your wallet.
