Stated Amount vs. Agreed Value Car Insurance

Quick Answer

Stated amount and agreed value car insurance policies both establish vehicle value by agreement between the insurer and the owner, but there are some striking differences.

A man smiles while looking out the window of his car with passengers and a dog in the back seat.

Stated amount and agreed value car insurance policies let owners come to an agreement with an insurance company about the value of their vehicle—but they're not the same thing.

These policies may help owners secure lower insurance costs or higher valuation for customized parts. They generally apply to unique vehicles and may be more difficult to find from traditional car insurance carriers.

What Is Stated Amount Insurance?

Stated amount insurance—also known as stated value—reflects the value you believe your vehicle to be worth. This may be the value you are willing to accept in an accident in exchange for lower premiums. You may need to provide documentation to support your stated value.

Stated amount insurance may be the best way to value commercial vehicles. These vehicles often have special modifications, such as refrigeration systems or plows, attached.

Stated amount insurance takes into consideration features such as:

  • Condition
  • Mileage
  • Modified or specialized equipment
  • Upgrades
  • Rebuilt parts such as a new engine

Another important component of insurance valuation to understand is actual cash value. Actual cash value is what the vehicle is worth at the time of an accident. The insurance company may compare the stated amount and the actual cash value, paying out for the lower value only.

Part of the goal of stated amount insurance is to lower the cost of premiums by lowering your expectation of the value of your vehicle. Therefore, it's important to get your stated amount value accurate. This way you don't overpay your premiums only to receive a lower actual cash value payout.

When Should You Consider Stated Amount Car Insurance?

You may want to consider stated amount insurance when:

  • You want to tell the insurance company what your vehicle is worth.
  • You have a commercial vehicle with specialized parts.
  • You want to lower your commercial vehicle insurance costs by insuring an accurate stated amount value only.

What Is Agreed Value Insurance?

Agreed value—also known as guaranteed value—is a car insurance policy that establishes the value of a vehicle cooperatively between the insurer and owner. It is typically used for classic or antique vehicles.

To reach an agreed-upon value, the insurer and owner will consider the following proof of the value:

  • Appraisals
  • Photos
  • Documentation, such as part upgrade receipts

The value agreed upon by the insurer and owner is guaranteed if the vehicle is totaled. There is no depreciation of value under this kind of policy.

When Should You Consider Agreed Value Insurance?

You may want to consider agreed value insurance when:

  • You have a classic, collector or antique car.
  • Your car is appreciating in value.
  • You want to ensure your vehicle will be properly valued in case of an accident.

What's the Difference Between Stated Amount and Agreed Value Car Insurance?

Both stated amount and agreed value policies are types of insurance where customers get a say in the value of their vehicle. These values may be based on changes owners have made to the vehicle or unique, valuable features.

Stated amount car insurance lets you name the value of the vehicle you wish to insure. It is ideal for modified vehicles like commercial vans and trucks. You can choose a value that is acceptable to you so you can lower your premiums.

Agreed value car insurance has you work with your insurance company. Together, you agree on a value for the vehicle based on documentation and appraisals. Agreed value car insurance prevents a car that is appreciating due to age or rarity from being undervalued. Proper valuation is important in case of an insurance total loss payout.

The Bottom Line

Both stated amount and agreed value insurance policies are for unique vehicles. Stated amount is best for pinning down an acceptable value for your commercial vehicle and thus lowering your premiums. Agreed value is ideal for establishing a guaranteed value for your collector car that may be appreciating value.

If you decide to purchase a stated amount or agreed value policy, be prepared to work with your insurer. You may need to provide documentation to them to determine the vehicle's value. Keep records such as:

  • Service records
  • Receipts for modified parts
  • Estimates for future expected repair on rare vehicles
  • Regularly taken photos of current condition of the vehicle
  • Official appraisals

It's important to remember that most insurers do not provide these types of policies. So, if you're considering shopping for one, prepare for a potentially lengthy search.

Experian's auto insurance comparison tool can help you find and compare insurance policies in minutes. You can get an apples-to-apples plan comparison from over 40 of the top insurance providers and discover savings.

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