Agreed value vs market value car insurance
The difference between agreed value and market value on Australian car insurance, how each affects your premium and payout if your car is written off, and which one suits your situation.
When you set up or renew comprehensive car insurance in Australia, you are usually asked to choose between agreed value and market value. It is easy to click past — but this single choice decides how much you get paid if your car is written off or stolen, and the difference can run into thousands of dollars.
Agreed value
With agreed value, you and the insurer settle on a fixed sum your car is insured for, usually within a range the insurer offers. That figure is printed on your certificate of insurance. If the car is a total loss, that is the amount you are paid, minus any excess and any deductions set out in the PDS.
Agreed value tends to suit:
- Newer cars, where you want to protect against fast depreciation
- Financed cars, where you need enough to clear the loan
- Modified, rare or enthusiast vehicles worth more than a standard valuation would suggest
- Anyone who wants certainty about the payout in advance
Market value
With market value, the insurer pays what your car was worth at the time of the loss — based on its make, model, age, condition and odometer reading. The figure is not fixed in advance; it is calculated when you claim, often using industry valuation guides and recent sale prices.
Market value tends to suit:
- Older cars, where the value is already low
- Drivers who want the cheapest comprehensive premium
- Situations where locking in a value is not worth the extra cost
How the choice affects your premium
Agreed value usually costs more, because the payout is fixed and often higher. Market value is generally cheaper but shifts the valuation risk onto you. Neither is "right" — it is a trade-off between certainty and cost.
Why this matters at every renewal
Cars depreciate. An agreed value that made sense two years ago may now be well above — or below — what the car is really worth, and insurers often adjust the offered agreed-value range down each year. If you never look at the renewal, you can end up paying to insure a value that no longer matches reality, or discover the locked-in figure has quietly dropped.
@insuro.com.auaddress. Free during beta.Frequently asked questions
What is agreed value car insurance?⌄
Agreed value means you and the insurer agree on a set amount your car is insured for when you take out or renew the policy. If the car is written off or stolen, that agreed amount is what you are paid (less any excess or deductions in the PDS).
What is market value car insurance?⌄
Market value means the insurer pays what the car was worth at the time of the loss, based on its make, model, age, condition and kilometres. The exact figure is not fixed in advance and is determined at claim time.
Which is better, agreed value or market value?⌄
Neither is universally better. Agreed value gives certainty and can suit newer, financed or modified cars. Market value is usually cheaper and can suit older cars whose value is low anyway. It depends on your car and how much payout certainty you want.
Does agreed value cost more?⌄
Usually yes. Agreed value generally attracts a higher premium than market value because the payout is locked in and often higher, but it removes the risk of an insurer's valuation coming in lower than you expected.
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