Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Feb 3, 2020

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Insurance is a necessity when it comes to protecting certain valuable investments.

Collector cars that have had substantial amounts of money invested in their restoration and care-taking need insurance that will compensate owners for their investment as well as market appreciation, and this is where Agreed Value insurance steps in.

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Agreed Value Defined

Agreed Value is a type of insurance that will reimburse policy holders, in the event of a total loss, with an amount that has been agreed upon based on a valuation of their car that was provided when the policy was issued.

When taking out an Agreed Value policy, there may be an additional upfront fee to obtain it, but it will help ensure that policyholders get proper coverage and the maximum payout possible if they should have to make a claim.

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Who needs Agreed Value car insurance?

Agreed Value insurance is used for collector or classic automobiles. It also covers many other types of vehicles, including street rods and muscle cars, antique motorcycles, classic trucks, antique tractors, and kit or replica cars.

Drivers are often required to have at least five years of driving experience, with no more than one point on their record within the last three years. Additionally, every driver in the household must have regular insurance and a daily-use vehicle.

How is Agreed Value auto insurance beneficial?

The Agreed Value type of insurance policy is beneficial for owners who want to take care of their investment. Standard car insurance policies take into consideration that automobiles typically depreciate, and therefore will only pay out the market price of the car in the event of a total loss.

Agreed Value insurance, on the other hand, is tailored to vehicles that hold their value or appreciate.

If a classic car is stolen or written off as a total loss, the policy holder will receive a reimbursement based on the amount agreed upon between them and the insurance company when the policy was purchased.

This agreement of value should include dollar amounts invested in the restoration or repair of a classic or collector type of car, as well as an updated appraisal that includes any appreciation of the car’s value.

How much is Agreed Value car insurance?

Since Agreed Value insurance is structured to cover an investment type of vehicle, it is substantially less costly than standard insurance. The covered car is usually required to be kept in a secure garaged area, and limits are placed on the amount of mileage the car can be driven each year, as well as the number of points on the driving record of the owner.

Because of these limitations, a large degree of risk has been mitigated for the insurance company and this will be reflected in the lower auto insurance rates for the policy.

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Updating the Agreed Value

It is best to update the Agreed Value policy on an annual basis to account for any appreciation, or new mechanical or other restoration investments that have been made in the vehicle.

An appraisal may be required so that the insurance company has an unbiased third-party opinion of the current value of the vehicle. This also prevents the policy value from being set artificially high.

Necessary Information

In order to take out an Agreed Value policy on a classic or collector car, a person will need to provide a substantial amount of information to the insurance company about his vehicle. This will include detailed photographs of all sides of the car, including the engine bay, registration plate, the dashboard with current mileage showing, and the car interior.

In addition, any available history or records of car service, as well as information on original body paint, production year and model details are necessary. A current status on the condition of the car’s interior, as well as detail on every area of body damage must be included, and any major mechanical work including replacements needs to be noted as well.

Most likely, the insurance company will also require an independent valuation that has been performed by a specialist in classic car appraisals.

Agreed Value Insurance for Every Day Cars

Agreed Value insurance is not made to be used for regular, daily-use cars. Insurance policies are priced based on the amount of estimated risk the insurance company thinks is involved.

Each insurance company has their own complex algorithms that are used to factor in many details about the car, the driver and his driving history to come up with insurance rates. Since an Agreed Value policy carries a certain number of restrictions, it removes a substantial degree of risk from the insurer, therefore, the rates on an Agreed Value policy are much lower.

Conversely, a daily-use vehicle is subject to a greater degree of risk from being out on the road much more frequently, as well as possibly being parked outside of a garage and being given less care overall, and this increased risk results in a higher coverage price and a need for a different type of insurance policy.

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Agreed Value Insurance Companies

There are several companies that specialize in Agreed Value insurance for classic and collector cars. Some of these company sites have questionnaires on them as well, which help car owners decide whether or not Agreed Value is the right type of insurance for their vehicle.

Many of the companies’ websites offer a wealth of information for people who need this type of insurance, and some provide other useful resources for car clubs, exhibitions and service providers on their sites as well.

Some of the Agreed Value insurance providers that have a presence on the Internet are American Collectors Insurance Company, Grundy Insurance Company and Hagerty Insurance Company. Each of these companies provides quotes online, as well as policy purchasing and other functions.

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Related posts:

  1. American Collectors Car Insurance Review
  2. Collector Car Insurance for a Corvette
  3. Hagerty Auto Insurance Review