One of the most common challenges we come across when it comes to insurance is the misuse of terms. There are a lot of reasons for this. Marketing makes terminology sound interchangeable. Also many agents don’t truly understand the nuance, so they tend to gloss over differences as being equal. Sometimes it’s outright assumption by the insured. We get it, there is a lot to understand and most car enthusiasts just want to enjoy their cars. They are not really interested in learning about insurance to an extensive degree.

There may be no more common, and yet more impactful, misconception than the one that stated value and agreed value are the same thing.

Of course, with articles like this there is always the risk we come across pedantic. Are we splitting hairs or is there truly a difference? Is one better than the other? Is one of them bad? In this blog post we’ll hit each of these questions.

Before we dive in, a quick disclaimer. This blog post is intended for general information purposes only. Each driver, vehicle and situation is different. Also, we quote language around agreed value and stated value policies. These are examples, and your specific policy language may be different.

Insurance Value Settlement Types – A Primer

First, a quick primer on insurance valuation and settlement types. Stated Value and Agreed value are insurance settlement types and determine the method by which your insurance company determines the value of the vehicle. There are generally 4 commonly accepted settlement types:

  • Agreed Value
  • Stated Value
  • Replacement Value
  • Actual Cash Value

Typically, personal automotive insurance you’ll only find three – Agreed Value, Stated Value and Actual Cash Value. Actual Cash Value is the most common, and is the method used by the vast majority of automotive policies. We have an entire blog post comparing the differences and why they matter. And if you are unfamiliar with Stated Value, Agreed Value and Actual Cash Value we recommend starting with it.

What Is Stated Value

Stated value insurance is based on the idea that the insured states the value of the vehicle up front, and the insurance company rates the premium based on the value.

While this sounds ideal, the thing be aware of with stated value insurance is when comes to determining the value of the vehicle at the time of a claim or a loss.

Stated value will pay out the actual cash value of your vehicle (minus your deductible) or the amount you say it’s worth, whichever is less*

Phrasing used by most insurance companies when describing stated value policies

* Phrasing has been modified lightly to improve readability

What Is Agreed Value

Agreed value insurance is based on the idea that you and the insurance company agree up front to the value of the vehicle. The amount becomes a contractual agreement for the value of the vehicle.

We will pay the limit shown in the Declarations for each scheduled vehicle, which is agreed to be the value of “your covered auto”*

Phrasing used in an insurance policy to describe agreed value settlement

* Phrasing has been modified lightly to improve readability

What Is The Difference Between Stated Value and Agreed Value

As you can see pretty clearly, with stated value insurance while you may be declaring a value up front, the insurance company still will calculate the actual cash value of the vehicle when determining a payout or settlement.

When it comes to the phrasing for agreed value, there are no other conditions. It simply states that the value agreed is the value of your covered auto.

At the end of the day, we describe this difference as the burden. With stated value, if your insurance company decides the value is less than the stated amount, the burden moves to you to prove the value is higher, and that the actual value of the vehicle is more. While this could include cash value for things like modifications, they generally are under no obligation to pay the true replacement cost of the vehicle.

With agreed value the insurance company is obligated to pay the agreed value amount in the event of a total loss. The burden would be on them to show the value is less, and even then, they likely would need to show the value they agreed to was misrepresented in some way originally.

Stated Value Vs. Agreed Value When You Are Not At Fault

Another big difference between agreed value and stated value is how your insurance company will respond if you are not at fault. With agreed value, if you have the appropriate full coverage (including uninsured motorists, depending on the situation), they will generally ensure you get the full value of the vehicle, even if your own insurance company must pay to make up the difference.

With stated value, since their obligation is only the lesser of cash value and the stated amount, you generally wouldn’t expect them to go beyond what cash value is offered by the at fault insurance company.

Of course, how your insurance company responds could vary. But with agreed value coverage you know the value is protected, even when you are not at fault.

When Agreed Value Makes Sense

All things being equal, agreed value is generally always going to be the best option. If nothing else for the simple fact that it requires very little on your part at the time of loss to justify the value of the vehicle. Whether it’s protecting the value of a collectible car, a modified car or a unique vehicle like a RHD import that has no easy way to replace, agreed value makes substantially the most sense.

Still, not every driver, situation or car will qualify for agreed value coverage. With just about all agreed value policies there are also storage requirements, and potentially even usage limitations. And while certain cars and highly qualified drivers may be able to obtain agreed value coverage for their daily drivers, it’s not common.

When Stated Value Makes Sense

While agreed value may be superior, stated value can make sense in a number of situations, particularly when it comes to those cases where you wouldn’t qualify for agreed value insurance. A stated value policy may still have some qualifications and restrictions, it may be more readily available than agreed value insurance.

Also some insurance companies allow you to include the value of modifications in your stated value policy. So unlike traditional actual cash value policies which may outright exclude modifications, many stated value policies allow you to declare the value of additional items.


Bottom line, stated value and agreed value insurance are NOT the same. If you truly want to protect the value of the vehicle you are insuring, there is no question agreed value is the best choice.

But since everyone’s goal is to get the best coverage for your money, if agreed value insurance isn’t an option, stated value may still offer additional protection a standard actual cash value policy would not. So if you can get agreed value, do it. But if you can’t, stated value is still often a better choice than purely actual cash value.

For Information Purposes Only

Of course, like all of our blog posts – this information is intended to be educational. This blog post is intended for general knowledge and is not direct insurance or legal advice. You should read and review any policies carefully.

Shift Brokers Can Help You Navigate

We also recommend you work with an insurance broker who can help you navigate different policies. The best part about brokers are, they don’t represent the insurance companies. They represent you.

Shift Brokers is car insurance for car enthusiasts. We can help you understand the how different carriers will value your specialty car. In addition, we can help you select from insurance companies that will get you the kind of service and coverage you need. And because we are car enthusiasts ourselves and specialize in policies for car enthusiasts, we can help you navigate the unique needs and situations only car enthusiasts find themselves in. The best part is, because we are brokers, we represent you, not the insurance companies.

Request a quote and lets start talking cars.