A Guide To Agreed Value Car Insurance

Agreed value car insurance is an assured sum that is fixed by an agreement between the vehicle owner and the insurance company. Usually, cars are insured under a market value insurance, where the amount insured is for the sum that the car would expect to achieve in its current state. Whilst this form of insurance is suitable for most car owners, there are some situations in which an agreed value insurance can be beneficial.

Who Needs Agreed Value Insurance?

Agreed value car insurance is ideal for those who are the proud owners of, for example, a mint condition classic car, or for those who have optional extras fitted into their new car that increase the value above the usual market rate.

New cars that have these extras can, with an agreed value insurance policy, be replaced by a car with similar specification, despite the depreciation that occurs the instant that a new car is driven out of the dealership. Classic car owners can also benefit from an agreed value insurance, as the set market value for their particular car might not accurately reflect the car’s true worth. A pristine example of a classic car will, of course, be worth far more than the not restored and unloved counterpart. Agreed value insurance allows the car owner and the insurance company to come to an acceptable agreement as to the worth of the individual car.

car insurance

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Restrictions

Most agreed value car insurance policies will impose restrictions on the owner. Such restrictions can include mileage limits, or an agreement for the vehicle not to be used for commuting purposes.

It is usually the case that a car that is insured under such an arrangement should be parked in a garage for a certain percentage of the time, or have particular alarms or tracking systems in place. Furthermore, some policies also require that the policyholder own or have use of another vehicle for general use, thus demonstrating that the insured vehicle will only be used sparingly.

These restrictions and safeguards are in place to ensure that the insured vehicle is not used for everyday transportation, which lowers the likelihood of anything untoward happening to it.

Value For Money?

For those who drive a run-of-the-mill, standard specification car, market rate insurance is perfectly sufficient to cover any eventualities.

The additional cost that can come from an agreed value car insurance does not represent good value for money in such cases. If, however, the car in question is a cut above the average in terms of equipment or style, or is a pristine example of a classic, then an agreed value insurance policy can be more than worth the extra.

The restrictions imposed on such a policy serve to protect the insurers from heavy losses, whereas the policyholder can, in turn, know for a surety that in the event of loss or accident, he/she will be reimbursed to the amount that accurately reflects the value of their special car.

This guest post has been contributed by Brit blogger Zoe on behalf of So Switch.

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