# Agreed value

> What agreed value means in car insurance, how it differs from actual cash value and why classic and collector car policies use it.

Canonical page: https://statecover-guide.com/glossary/agreed-value/  
Last reviewed: October 28, 2026 by the StateCover Guide editorial team  
General information, not legal or insurance advice.

## Quick answer

Agreed value is a dollar value for your car that you and the insurer settle on when you buy the policy. The amount is written into the policy, and the car is covered up to that value without a deduction for depreciation. It is used mainly for classic and collector cars.

## How it works

An ordinary auto policy pays actual cash value, which falls as a car ages. A classic car can hold or gain value, and two cars of the same make and year can be in very different condition, so a standard price guide may not fit. Agreed value fixes the number up front instead. Because a collectible car's worth can rise, owners are advised to review and adjust the amount over time.

Policies built around agreed value usually come with conditions. The car generally cannot be a daily driver, mileage may be capped, it must be kept in a secure, enclosed place when parked, and some insurers require you to own another car for everyday use. A poor driving record can disqualify you.

Wording matters. If a policy uses a different phrase for the car's value, read how it pays after a total loss before you buy.

## Related terms

- [Actual cash value](https://statecover-guide.com/glossary/actual-cash-value/)
- [Depreciation](https://statecover-guide.com/glossary/depreciation/)
- [Total loss](https://statecover-guide.com/glossary/total-loss/)
- Guide: [Classic car insurance](https://statecover-guide.com/blog/classic-car-insurance/)

## Sources

- [Insurance Information Institute, Insuring your classic car](https://www.iii.org/article/insuring-your-classic-car) — value agreed and written into the policy, covered without depreciation, usage and eligibility limits
- [NAIC, Glossary of Insurance Terms](https://content.naic.org/glossary-insurance-terms) — valued policy, where the value is agreed in advance