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Agreed Value vs. Stated Value

Man standing in front of rusty classic car

Is there a difference between Agreed Value and Stated Value?

Yes there is.  Although they sound similar.  And one would assume that they are similar.  But one would be wrong.

It’s important to understand the difference between agreed and stated value, because ultimately how your vehicle is valued determines how much you get paid for an insurance claim.  This is especially important for owners of classic, exotic or other specialty vehicles.  After and insurance claim, your vehicle can be valued 3 ways.

Actual Cash Value (ACV)

Basically, Actual Cash Value or ACV means what’s your car worth today.  This is the most common valuation for vehicle insurance. If you have a standard auto policy, this is probably how your policy language reads.

So, if you have an accident, an adjuster will determine the value of your vehicle based on Kelly Blue Book, NADA, or other current indexes.  They make an offer for the claim, and if it seems fair, then you’re on your way.  If you feel the claim is worth more (supported by proof), then they may adjust the offer.  In a worst case scenario you may need to rely on a mediator to help resolve a disputed value.

Agreed Value

If you’re looking for more control over the outcome of your claim, then you’ll want to purchase an Agreed Value policy.  This is the valuation that Hurley Insurance recommends for collector vehicles.

The Agreed Value of the vehicle at claim time is the value that you and the underwriter agree on when the policy is written.  It’s really that simple.  So if you say, ‘my vehicle is worth $45,000’, then you insure it for $45k.  If the underwriter agrees, then they’ll write the policy and charge accordingly.  If the vehicle is totaled 6 months later, you’ll get a check for $45,000 minus your deductible.

Again, Agreed Value is a great option to give the consumer control of the outcome of a claim.  The last thing you want is to have to fight a lowball offer after you just crashed your prized ride.

Stated Value

Stated Value is a misnomer.  It leads consumers to believe they’ll get paid the value stated on the policy.  They will get that stated value, but only if it is less that the ACV of the vehicle.

That’s right, the policy language has a gotcha…  It says something along the lines of: We will pay the Stated Value of the vehicle or Actual Cash Value, whichever is less..  Ouch.

Picking The Right Valuation for Your Car

The vast majority of auto policies are written on an actual cash value basis.  And for most drivers, ACV works just fine.  After all, it’s easy enough to put a value on a new F-150.

However, once you get into the classic, collectible or exotic market, vehicle valuations can be subjective.  Take the guess work out of the equation by purchasing an Agreed Value policy.

What about Stated Value?  When is it a good time to buy a Stated Value policy?  Well, there is one scenario that comes to mind.  When you can’t find other coverage.  Stated Value coverage lets you control the premium up front by stating the max value the policy will pay.  However it doesn’t guarantee the payout.  So if Agreed Value is an option, we say go Agreed over Stated Value.

Looking to insure your beloved classic or your regular grocery-getter?  Call today to talk to one of our team.  Prefer to start online?  Click here to get the ball rolling on an insurance quote.  We look forward to hearing from you!