Agreed Value Insurance
The Difference between Agreed Value, Actual Cash Value and Stated Amount Insurance
Since 1947, Grundy has insured antique autos with Agreed Value policies; and with our new products like the Motor Vehicle Program (MVP), Grundy extends Agreed Value coverage to protect all your vehicles including daily drivers.
AGREED VALUE policies set the limit that a policyholder will receive and an insurance company will pay in the event of total loss or theft of a vehicle. Obtaining an Agreed Value policy is a fairly simple process. The applicant submits an application, indicating the values that they would like to have insured. Both the vehicles and values are then reviewed by Grundy underwriters, who are knowledgeable both in insurance and a variety of automobiles- from antiques, classics and exotics, to daily driver autos, motorcycles and motor homes. When working with a new application, underwriters examine photos and any other supporting documentation the applicants submits; and, the vehicle’s value is compared to the agency’s guidelines on similar vehicles in similar condition.
Occasionally, a Grundy underwriter will request additional information, such as restoration receipts or additional photos to substantiate a requested value. Underwriters will also tell applicants if their requested value is too low or too high. Insurance companies do not like to underinsure or over-insure, and the goal of all parties is to insure your car for its market value and the owners investment. Once this simple process is complete, the Agreed Value policy is issued.
Although the specialty car hobby (from which Agreed Value developed) has grown dramatically over the last decade, it is still too small for big insurance companies to invest the money it would cost them to train their personnel (agents, underwriters and adjusters) to understand specialty vehicles and their values so they do not offer Agreed Value. Instead, they may offer Actual Cash Value or Stated Value policies.
ACTUAL CASH VALUE does NOT establish the amount a policyholder will receive in advance. It is the most commonly used form by the majority of the big automobile insurance companies. This is because big companies primarily insure newer vehicles that are produced in the hundreds of thousands and the value at the time of loss is determined by make, model, options, age and condition. This involves starting with the Cost New and deducting a certain percentage for each year the vehicle is old, plus deductions for observed or expected “wear and tear.” In rare cases additions or increases in value are granted to owners of vehicles who can “prove” that their car was maintained better than the expected average.
STATED VALUE does NOT establish the amount a policyholder will receive in advance. The term Stated Value is very misleading because a Stated Value policy is nothing more than an Actual Cash Value policy with an upward limit on how much an insurance company will pay.
As previously mentioned, there are certain instances where an Actual Cash Value policy will pay additions or increases to policyholders who can “prove” their investment. Stated Value was developed 50 years ago (when collectors started investing large sums in great vehicles) by insurance companies to protect them from paying “more than they bargained for.” Stated Value is the worst option for any vehicle, because it will depreciate and deduct on the downside , but limit to the Stated Value the upside of your settlement.
Do you have the right coverage?
Grundy Insurance offers you peace of mind and the ability to know what you will get before a disastrous accident occurs. Grundy only offers customer Agreed Value policies— and, when we agree in advance, we avoid arguments with adjusters and meet our policyholders’ expectations! Grundy offers Agreed Value on more than just vehicles. With our new Special Collections policy, we will cover a variety of collectible items with Agreed Value.