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MY CAR

What’s the difference between market value and agreed value?

6 May 2019

Whether you’re buying a new car or one that’s been ‘pre-loved’, navigating insurance can be tricky. If you’re shopping around or making a claim, you probably have a bunch of questions about car insurance.

Getting a few of them answered and understanding things like the difference between market value and agreed value might help you be more confident when deciding to insure your vehicle.

Market value: How much am I getting?

When researching car insurance options, you may come across the term ‘market value’. This just means the amount you’d reasonably pay for your car on the open market, if you were to go out and buy it again.

Market value is relevant if you’re in a car accident and your insurer needs to make a payout. Under a market value agreement, your insurer would determine how much your vehicle is worth based on what similarly aged cars are selling for on the open market, while taking into account your vehicle’s make, model, and kilometres travelled.

Suncorp uses something similar to ‘market value’, but with a little bit more flexibility. When you take out a Comprehensive Car Insurance policy with us, you’ll be asked to set an ‘amount covered’. Don’t get scared off by the jargon – all that means is the amount your car will be covered for if your car is written off or needs repairs. It’ll include the value of any modifications or accessories that your vehicle has, too.

You don’t have to come up with your ‘amount covered’ all on your own, though. When you get a quote from us, we’ll ask you a few details about yourself and your car, and then give you a dollar figure range. You can then adjust the amount you’re covered for to any number within that range.

For Fire, Theft & Third Property Damage cover, your amount covered will be the market value of your car or the limit shown on your certificate of insurance (unless it’s stated otherwise in your policy). Similarly, you’ll be covered for an amount if your car is written off or needs some repairs.

 

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Agreed value: Locking in the price  

While market value does some of the heavy lifting when it comes to deciding on what you’d reasonably pay for your car, agreed value locks in a pre-determined amount your car is worth at the time of your policy renewal.

Agreed value is more of a specialised offering and allows you to have a discussion with your insurer to come up with an agreed amount, which may or may not neccesarily be the actual market value. There are usually caveats to that too.

For example, insurers aren’t going to let you insure your 1999 Toyota Camry for $60,000 because your car isn’t worth that much. They could be more likely to agree to $2,000 for the Toyota Camry. And by comparison, the market value of the car may be somewhere below that dollar figure. So with this mind, agreed value is not a common insurance option in Australia and it can affect your premium costs more than market value agreements.

Get the right cover for your vehicle

Everybody’s needs are different when buying car insurance. So it’s important to weigh up the pros and cons for of different types of car insurance.  

You may want to think about whether you’re insured for the right amount to ideally get back what you put in.

Choosing Comprehensive Car Insurance – the ‘bells and whistles’ cover against accidental loss or damage – is something that can put you back in the drivers’ seat if things go wrong. It’s also helpful to think about Roadside Assistance or windscreen and window glass cover too.

When you get a quote for Comprehensive Car Insurance or Fire, Theft and Third Party Property Damage cover with Suncorp, you can choose the amount you want to cover your car for – referred to as the ‘amount covered’.

We’ll provide you with a dollar figure where you can adjust the amount to any number in that range. This will then be the amount we’ll pay for an insured event, minus any fees and charges.

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Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Information provided is general advice only and has been prepared without taking into account any person's particular objectives, financial situation or needs. Please read the relevant Product Disclosure Statement before making any decision regarding this product. Suncorp Roadside Assist is provided by Digicall Assist Pty Ltd. For full coverage details, please see the Suncorp Insurance Roadside Assist Terms and Conditions .