An agreed value is the maximum amount that your insurer will pay for your vehicle. You and your insurer will come to an agreed value when you first purchase insurance, then it’s reviewed each year upon renewal. This value doesn't change during your period of insurance with us, unless you contact us to make changes. Your agreed value should be enough to replace your vehicle in its current condition, as this is what you will receive if your car is deemed a total loss, minus any applicable excess and any unpaid premiums.
Your agreed value is automatically reviewed at each renewal. It is important you check the value shown on your policy schedule and get in touch with us if you have any concerns or need to make any changes.
When your policy renews, your agreed value is updated based on a figure provided by Redbook, a company that specialises in vehicle valuations. They calculate valuations using current market conditions such as sales at auction, dealerships, manufacturers, newspapers and field research. Redbook update us with new values on a monthly basis.
Although your car's agreed value is one of the factors we use to determine your insurance premium, it's not the main factor that drives price. The premium you pay can be influenced by a range of factors, including claims data, your claims history, your location, your listed drivers, the type of vehicle you own and more. This means that each year your premium can change, even if your personal circumstances haven’t. As we consider various factors that influence the premium, you may see a decrease in your car’s agreed value and an increase in your premium when your policy renews.
It’s important to note that your agreed value only applies in the instance of a total loss claim. As the vast majority of claims are not a total loss, your agreed value doesn’t affect your premium as much as you may think. For example an accident involving a $10,000 car and a $20,000 car may result in similar claims costs to repair the damage. Accordingly, a 10% reduction or increase in your agreed value does not equate to an equivalent change in your premium.
As the value of a car can depreciate over time, it is common to see a new agreed value offered at renewal. We understand that this doesn’t account for the specifics of your vehicle (such as mileage and condition), so if you feel that the agreed value we've offered doesn't match your vehicle, please do let us know.