Agreed value is where the insurer has agreed a valuation for your vehicle with you and set it within your policy schedule. If your car is stolen or written off, this is the value your insurer will pay out when you make a claim.
If you don’t have an agreed value written into your policy, any claim would be settled at the insurer’s opinion of the market value at the time of the claim – which could be less than you believe your car is worth.
It’s advisable to update your agreed value each year at renewal, either by getting an independent valuation or by looking at adverts online or in magazines for similar cars.
Because classic car insurance premiums are partly calculated on the value of the vehicle, it’s important your agreed value is not too low, or you run the risk of underinsurance clauses kicking in when you claim.
For example, if you insure a £20,000 vehicle for an agreed value of £10,000 – and therefore pay a premium based on that valuation – even a partial damage claim could be settled at only 50% of its cost.