Agreed value car insurance policies explained

If your car's a little unusual, agreed value car insurance might be something to consider. Agreed value policies can be tricky to find, but they're well worth the effort if your car's a bit different. This type of policy isn't for everyone, but we're here to help you work out if it's right for you.

What is agreed value?

Agreed value is the amount your insurer agrees your car is worth when you buy insurance. If your car gets written off or stolen, your insurer will pay you the agreed amount.

Without an agreed value, your insurer will pay the current market value of your car at the time of the claim.

That means you could get paid a lot less than the value of the car when you first bought your insurance.

How do they work?

At the start of your policy you'll agree the car's value with your insurer. Your insurer will stick by this value if your car gets written off or stolen.

Our handy calculator can help you to work out how much your car's worth. To get an agreed value insurance policy you'll need to prove your car's worth.

This might mean providing photos, receipts, and other documentation. You may also need to get a professional independent valuation.

Who are agreed value policies for?

Agreed value policies are mostly used for classic cars or modified cars. It makes sense to get this policy if your vehicle is unusual or more valuable than others of its kind.

The car may have unusual specifications that the market value won't take into account. Rare or particular models can fetch way beyond their market price.

So you'll want an agreed value price to ensure you don't lose out financially. An agreed value policy might also be a good idea if you've got a high performance car. Insurers may have different ideas about what a high performance car is.

But it'll usually have a 'high performance' classification from the factory. You might want to check if your insurer offers replacement car insurance as part of the policy.

This usually applies to cars less than 12 months old, so it's worth checking your individual policy details. 

What kind of cars are covered by agreed value insurance?

Agreed value insurance usually applies to unusual cars. But what do we mean by 'unusual?'

• Classic: Insurers tend to view cars built 15-25 years ago as 'classic.' But according to many classic car clubs, they have to be over 30 years old. This can vary though, and the car's design and cultural impact can also play a role in making it a classic. You can buy classic car insurance to give you peace of mind if your car was written off or stolen. Classic car insurance usually includes agreed value pay-outs as part of the policy.
• Vintage: A vintage car refers to cars built between 1919-1930. They often don't have modern features like air con and power steering. They're often insured under specialist policies that account for the repairs and replacements that you might need. Vintage cars are rarer than classic cars, so you may need to ensure your policy covers all its requirements.
• Modified cars: Car modifications could include cosmetic changes like paint or alloy wheels. They could also be changes to the bodywork, suspension or brakes. Any modification you make to your car should be declared to your insurer. Even if you're unsure if it counts as a modification, it's worth checking.
• Imported cars: This refers to cars that have been imported from another country. Cars manufactured outside of Europe are known as 'grey imports.' Because these cars are made outside of the UK, it can make repairs tricky. And you may need to pay more to import any parts that need replacing. Imported car insurance is usually more expensive as a result.
• Refurbished cars: You might want an agreed value policy to protect the value of a refurbished car. Only you'll know the expenses and the effort involved, so you'll want to make sure you don't lose out.
• Kit car: Kit cars are one-off creations that are made at home, and usually take a lot of time and effort. The agreed value can reflect the particular care and effort you've put in. So it's well worth protecting the value.
• Performance cars: Expensive, high-power cars like sports cars. The agreed value can take into account any increase in its value.

Where can I buy this type of policy?

Agreed value policies can be tricky to get your hands on. They're not usually covered on standard car insurance policies, and not all insurers will offer it as an optional extra.

You might need to shop around to find what you're looking for. You may need to use a broker or look at individual specialist providers.

Insurers don't always agree with the value figure you put in front of them. Sometimes they'll counter with a lower amount. If this is the case and you're not convinced, you can always compare it with other insurers.

How do I get an agreed value on my car?

To get an agreed value on your car, you'll need to provide some evidence. The evidence should prove that the car is worth more than the market value.

Exactly what evidence you'll need can vary from insurer to insurer. So it's worth double checking what's required. Here's some of the evidence you might need:

• Photos: It's time to clear some space on your camera roll. You'll want to take photos of the inside and outside of the vehicle, as well as the engine.
• Receipts and documentation: You might also need to dig out any receipts you have. This might be proof of car services or any repairs and restoration done on the car. You might also be asked to show some ads for similar cars for sale.
• Independent valuation: Some insurers will want you to get an independent valuation. You'll get a valuation certificate which you can show your insurers as evidence. The certificate is non-transferable, so you'll have to repeat the process again if you change insurers. Car clubs sometimes offer independent valuation as a service, but you'll have to check.

What are the pros and cons of agreed value policies?

So is it really worth it? We'll lay out the pros and cons of agreed value policies so you can make the best choice:

Pros

• If you've invested a lot of time and money into your car, an agreed value policy could mean you don't lose out.
• You can use this type of cover for a wide range of cars and vehicles.
• If your car gets stolen or written off, you've got peace of mind that you can claim the full agreed amount back.
• The payout can be enough to buy a replacement car of a similar value.
• Even if the car depreciates in value, the agreed value is fixed for the policy term.

Cons:

• Agreed value policies are expensive.
• These types of policies can be trickier to find than market value alternatives.
• There may be extra costs involved, such as getting a professional valuation.
• You might end up paying more for cover if your car depreciates in value over time.

Is there an alternative to this type of policy?

If your car is less than 10 years old, you might want to think about guaranteed asset protection (GAP) insurance. We don't currently offer quotes for this product, but it's worth shopping around for.

GAP covers the difference between what your insurer will pay out for the car and the car's market value when bought it.