For many individuals, purchasing insurance is a relatively straightforward process. You provide an insurance carrier the details of the car, home, or personal belongings that you’re looking to cover, and it lets you know how much coverage you can purchase and at what rate. But what if you’re in the market to protect a high-value item?

Those in the industry understand that standard insurance may not be enough for certain things, like expensive jewelry, art, or a collector car. In these instances, your insurance agent can work with you to determine what type of policy best meets your needs. In most cases, these are called agreed value and stated value policies.

If you’re looking for auto insurance that’s robust and affordable, Insurify can help. You’ll be able to compare cheap car insurance quotes from multiple companies in a matter of minutes. However, those who need special coverage for a collectible item or other high-ticket valuable may want to continue reading.

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Agreed Value vs. Stated Value Insurance

When you’re exploring insurance options, it might seem like agreed value and stated value insurance policies are the same. Yet, according to your insurance company, the two are entirely different. Let’s break down exactly what these types of policies entail.

First, it’s important to understand how a traditional insurance policy works. Whether you’re insuring your car or have a commercial property policy, your insurance carrier will most likely use actual cash value (ACV) to determine the policy details. This means that in the event of a total loss, you would receive enough money to replace the item with a brand-new version minus any depreciation.

While ACV works well for your standard auto policy, it’s not always appropriate for other types of insurance coverage. Classic car owners, individuals who own rare antiques, and those with expensive jewelry will often need additional coverage.

Agreed value options, also called guaranteed value, allow you and your insurance carrier to mutually decide how much an item is worth. You may need to have your item appraised before the policy is written and at every policy renewal. Still, you will receive the full agreed value coverage amount without having to worry about depreciation in the event of a total loss.

Stated value insurance is typically reserved for items like classic cars, and while it won’t provide you with the full replacement cost in the event of a total loss, it can still be a smart option. In stated value scenarios, you’re able to tell your insurance agent how much your item is worth. During the claims process, however, your carrier will determine the amount of money you receive. 

Agreed Value Car Insurance

Not all major insurance industry carriers offer these options, so it’s essential to do some research before purchasing a car insurance policy. Some companies, like GEICO and State Farm, will offer agreed value options only for classic cars, while others may not be able to provide you with these policies.

Classic Car Insurance

Unlike a typical car insurance policy, coverage for a classic car is most commonly determined using an agreed amount method. You won’t have to worry about factoring in any depreciation. If your vehicle is completely totaled after an accident, you’ll know what type of payout to expect.

Agreed Value Insurance for Other Insurance Coverages

Valuable items, like fine jewelry, antiques, or musical instruments, may be possessions you’ll want to cover using an agreed value policy. Keep in mind that a bill of sale or an appraisal will likely be required as proof of the item’s value, and it may take a bit of negotiating to find a figure that both you and your insurance carrier will agree on.

Agreed Value vs. Stated Value FAQ

What is an “agreed value” insurance policy?

Insured items naturally depreciate over time, and rather than having to factor that into an insurance policy, an “agreed value” option offers a set payout in the event of a total loss. Both you and your insurance carrier will decide how much your item is worth before the policy is written.

What is agreed value vs. stated value car insurance? 

While you can determine an agreed value with your insurance agent when it comes to your car insurance, that may not always be the best option. Popular for classic car owners, a stated value policy allows you to determine the replacement cost of your item. This can help keep premiums low, but keep in mind that since you likely won’t receive a full payout in the event of a total loss, you’ll need to take some risk management into consideration.

Where can I compare car insurance quotes for free online? 

Whether you need standard liability insurance choices or looking for something more specific, Insurify can help you find car insurance quotes with ease. Compare rates from multiple companies at once and take the stress out of shopping for coverage.

Conclusion: How to get the best and cheapest car insurance

Insurance for more valuable items can sometimes be a bit complicated, as several factors need to be considered before you enroll in a policy. The market value of your items could change quickly, making an agreed value or stated value policy a better option in the long run.

Drivers interested in standard coverage will easily find the best and cheapest car insurance with Insurify. After answering a few simple questions, you’ll be able to compare car insurance quotes and find the policy that best meets your needs.

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Updated July 23, 2021

A former licensed insurance producer, Courtney Levin has been a freelance writer since 2016. She graduated from Sonoma State University with a degree in Communications and has been creating content for Insurify for nearly two years.