Updated June 15, 2022
Sometimes, standard policies that rely on actual cash value (ACV) for insured items don’t provide enough coverage. People with high-value classic cars, expensive jewelry, or art may prefer agreed value or stated value insurance. In the event of a total loss, agreed value policies set a specific payout, while stated value policies let people decide on the replacement cost.
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Agreed value and stated value insurance coverage are two separate insurance policies.
Auto insurers calculate rates based on driver and personal profiles, car type, and more.
Insurance providers often provide policyholder discounts for bundling home and auto.
How are agreed value insurance and stated value insurance different from standard insurance?
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When purchasing standard insurance, people simply provide necessary car, home, or personal item details to their insurance provider to learn the type of coverage available for purchase, as well as the expected insurance costs. With agreed value and stated value insurance, the value of the insured item is provided by the individual and used by the insurer to decide the payout.
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What is agreed value insurance?
In an agreed value insurance policy, a policyholder and an insurance company agree on a fixed value for an insured item. This agreed-upon value will be paid out by the insurance company to the individual if the insured item or vehicle is lost, stolen, or totaled and a claim is filed. The decision for the guaranteed value occurs prior to finalizing the insurance policy.
With agreed value coverage, the insured item will not face value depreciation over time because the agreed value does not rely on the ACV or market value of an item—a factor that appeals to policyholders. Still, insurance companies do have a significant say in determining the valuation. These policies tend to skew on the more expensive side due to the appraised value.
How do the policyholder and insurance company decide on the agreed value of an item?
To determine the guaranteed value, the item in consideration for insurance may need to be appraised prior to when the policy is written out and at the time of each policy renewal. Having an appraisal for a collector car, classic vehicle, antique, jewelry, art, or other item allows the insurance agent to better understand the value of the item a policyholder wants to insure.
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What is stated value insurance?
Policyholders with stated value insurance inform their insurance company of the worth of the insured item, but the individual likely will not receive the full value in replacement costs if they experience a total loss of their item. Instead, the insurance company decides on the amount the individual will be paid during the claims process, which likely won’t match the stated amount.
Generally speaking, stated value insurance costs less than agreed value insurance. Because the insurance company doesn’t necessarily adhere to the provided or appraised value of your vehicle, collectible, or another item, this type of policy typically results in smaller replacement cost payouts in the event of a total loss and an insurance claim.
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How do the policyholder and insurance company decide on the stated value of an item?
Stated value coverage is commonly used for classic car insurance. Though the policyholder provides how much the classic car or other item is worth, the insurance company makes the final decision in determining the replacement cost of the insured item. The company looks at the stated value and actual cash value and awards the policyholder with the lesser of the values.
Which companies offer agreed value and stated value insurance?
Specialty insurers that provide agreed value and stated value auto insurance policies for unique vehicles like collector or classic cars include Hagerty, American Collectors, Grundy, American Modern, and more. Though these companies may vary from standard insurance providers, their specialty focus means they excel in executing insurance under the umbrella of their focus area.
Some of the nation’s major insurance companies also provide car insurance policies for classic and other collector car owners that account for a car’s determined valuation. Well-known companies offering some form of agreed value, stated value, or classic car insurance include GEICO, Safeco, State Farm, Allstate, American Family, Liberty Mutual, USAA, and others.
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Frequently Asked Questions
Agreed value insurance requires a policyholder and their insurance company to agree on the valuation of a typically expensive or collector vehicle, a home, or another personal item before writing an insurance policy. This agreed-upon value will be paid out by the insurance company to the individual if the insured item or vehicle is lost, stolen, or totaled and a claim is filed.
With stated value insurance, policyholders inform their insurance company of the worth of the insured item. The insurance company then decides on the amount the individual will be paid during the claims process, which is determined by looking at the stated value and actual cash value before awarding the person with the lesser of the two values.
Though agreed value and stated value insurance typically both involve expensive and collector items, agreed value coverage tends to cost policyholders more. Agreed value insurance payout amounts often stem from appraised values, while stated value replacement costs rely on the less costly choice between the actual cash value and the policyholder’s stated value.
Between monthly insurance premiums and deductibles, auto insurance costs rack up quickly for many drivers. To make sure you’re finding the most affordable auto coverage that meets your specialized insurance needs, utilize the Insurify car insurance comparison tool and compare dozens of rates from the comfort of your couch. Give it a try for yourself today to find opportunities to save!
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Data scientists at Insurify analyzed over 40 million auto insurance rates across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.