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
Sources
- Insurance Information Institute, Insuring your classic car value agreed and written into the policy, covered without depreciation, usage and eligibility limits
- NAIC, Glossary of Insurance Terms valued policy, where the value is agreed in advance
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