One number is fixed now. The other is found later.
Agreed value is the dollar figure on your schedule. One wording we read defines it as exactly that: “the dollar value stated in Your Policy Schedule. This may be altered by mutual consent.” If the car is written off, that’s the payout, before deductions.
Market value is set after the loss: the cost of a car of the same make, model, age and condition just before it happened. One insurer says it works that out from “local market prices for vehicles similar to your vehicle” and industry valuation guides.
For an everyday car, the two land close together. For a car with few sales to compare, they can be far apart, and only one of them is a number you agreed to.
Agreed value is the common choice for prestige cars.
- Rare, limited or collectable cars: valuation guides have little to go on, so market value becomes a negotiation after the loss.
- Classics: the value rests on condition and history, which a guide can’t see. Classic car insurance has more.
- Modified cars: declared modifications can be built into the agreed value.
- A car whose value is rising: agreed value won’t follow it up automatically, so it needs reviewing, but it won’t fall either.
Market value can suit a late-model car with plenty for sale. One wording also offers a third basis, “lifetime value”, which replaces the car with a similar one of the insurer’s choice, provided the car has been insured with them continuously from within three months of buying it.
A 2.3× spread on one agreed value.
In a test quote through our form in August 2026, a 2022 Land Rover Defender 110 D300 SE was put up at an agreed value of $120,000: driven to work, under 10,000 km a year, kept in a locked garage. Two insurers on our panel priced comprehensive cover at $5,715.45 and $2,453.17 a year, each including GST and stamp duty, with the same $2,000 excess.
Same car, same figure, same answers. One quote doesn’t make a rule, but it shows why the price of agreed value cover is worth comparing.
Where agreed value policies differ.
None of the three car wordings we read sets a range for the agreed value or requires a formal valuation, though one says it may ask for a recent receipt, photographs and a list of modifications with their values. The differences are in what happens around the payout:
| Policy A | Policy B | Policy C | |
|---|---|---|---|
| Value bases offered | Agreed or market | Agreed or market | Agreed, market or lifetime |
| GST in the sum insured | Included | Excluded; GST added at a total loss if you’re not GST-registered | Not stated |
| The wreck | Yours to keep free if the car is 25 years or older; otherwise first option to buy | The insurer’s; keeping it costs its fair value | The insurer’s; keeping it at their discretion, salvage value deducted |
| Stolen car treated as a total loss after | 21 days | 14 days | 14 days |
| New car replaced, not paid out | First 48 months | First 3 years and under 70,000 km | First 2 years |
Check whether your figure includes GST.
One wording says sums insured “are inclusive of GST”. Another says the value “will exclude GST”, and its own worked example turns a $42,000 agreed value into a $46,200 payout for a customer who isn’t registered for GST.
On a $250,000 car, that’s about $25,000 either way. Before you settle on a figure, read which way your wording counts it. If you’re registered for GST, expect the input tax credit to come off a payout either way.
Agreed value, less three things.
- The excess. On a prestige car it’s often set by the car, not by you. On the specialist quote in our Porsche example, the insurer set it at $2,500.
- Any unpaid premium for the year, if you pay by the month.
- The wreck, if you keep it, under the wordings that charge for it.
And one thing never added: modifications and accessories you didn’t declare. One wording says they “are Your property unless We otherwise agree to pay You for these”.
Choose agreed value in the form.
Enter the rego, choose agreed value and type your figure. It goes to every insurer on our panel that can take the car. Mainstream insurers quote online up to $150,000, and the prestige specialist is asked from $100,000, or for any car 25 years or older or modified. See also luxury car insurance and supercar insurance.
Agreed value FAQs
What is agreed value car insurance?
A policy where you and the insurer agree the car’s value when the cover starts. If the car is written off or stolen and not found, that figure is what the insurer pays, less any excess and anything else the policy deducts. It’s shown on your schedule and can be changed by agreement.
Is agreed value better than market value?
It depends on the car. For a car with a clear market and plenty for sale, market value tracks what you’d pay to replace it. For a prestige, rare, modified or classic car, valuation guides are thin, and agreed value removes the argument about what it was worth. It’s also commonly the more expensive option to insure.
Does the agreed value include GST?
Check the wording. Of three car wordings on our panel, one says the sum insured includes GST, another says it excludes GST and adds it at a total loss for someone not registered for GST, and the third doesn’t say. On a $250,000 car, that’s a difference of about $25,000.
Can I insure my car for more than it’s worth?
The agreed value has to be accepted by the insurer, and it may ask for a recent receipt, photographs and a list of modifications with their values. Insuring for more than the car is worth costs more in premium and doesn’t change what a market buyer would pay for it.
What is deducted from an agreed value payout?
In the wordings we read: the excess, any unpaid premium, and the value of the wreck if you keep it. Accessories and modifications you didn’t tell the insurer about aren’t part of the value.
Should I update the agreed value each year?
It’s worth checking at every renewal, especially for a classic or a car whose value is moving. The figure is fixed until you and the insurer change it, so it won’t follow the market up on its own.
Is this personal advice?
No. It’s general information about how car insurance values work, and it doesn’t consider your objectives, financial situation or needs. Read the PDS before you decide.
Reviewed by Andre Lang on 20 October 2026.
Andre Lang is an Authorised Representative (AR No. 1323803) of Australian Broker Network Pty Ltd (AFSL 253131), and a director of Lang Broking Co Pty Ltd (Corporate Authorised Representative No. 1323797), which trades as Luxury Cover.
Luxury Cover arranges insurance as a broker. The policies are issued by the insurers, and what they cover depends on the policy you choose. Each quote links to its product disclosure statement. Quotes described on this page were test quotes run through our own form; your price depends on your car, your answers and the insurer. General information only.