Choosing auto insurance wisely is something that every vehicle owner should do. There’s actually more choices than many realize. For example, did you know that it’s possible to agreed value car insurance MD for your new or your classic vehicle? Here are some of the more common questions that people ask about this option.
What is Agreed Value Versus Market Value Insurance?
Agreed value refers to a covenant that you and the insurance provider reach about the value of your vehicle. Market value involves determining how much your vehicle is worth based on current market conditions. With the latter, you do not have any input in terms of determining the value that the provider assigns.
That agreed upon figure helps to dictate the cost and the scope of your insurance coverage. While there are qualifications that you must meet and the value must be within reason, this approach can help provide a degree of coverage that would not be possible otherwise.
How is the Agreed Value Determined?
Agreed value is often determined using a combination of factors. One is a full appraisal of the vehicle by a certified professional. Photographs that clearly demonstrate the condition of the vehicle may also play a role. Individual insurers may also have specific criteria that must be met in order to come up with a value that may be used for the coverage.
Assuming the recommended value is acceptable to you as well as to the insurance provider, it’s possible to proceed with the policy preparation. As with any auto insurance policy, make sure you read all the terms and conditions before signing anything.
When is the Value of My Vehicle Evaluated?
One of the benefits of agreed value car insurance is that the value is only evaluated when it’s time to renew the policy. This is different from insurance based on market value, since it’s possible for that value to decrease a little each day. If you have agreed value coverage and the term is for one year, the value of your vehicle is only evaluated annually.
This approach can come in handy if you are involved in an accident. In order to determine if the vehicle can be repaired or if it need to be totaled, the insurer uses the most recent evaluation rather than checking the current market value.
Is Agreed Value Car Insurance More Affordable?
While it’s not impossible for agreed value car insurance to cost less, the more common scenario is that it will cost a little more. That’s because this form of auto insurance allows owners to go with a value that’s usually more than the market value. This is especially true when it comes to classics or other types of vintage vehicles.
What you get in return is more coverage that you can call upon in the event of some type of damage to the vehicle. As long as the damage is the result of a covered event, you’re likely to have lower out of pocket expenses related to the repairs.
What type of auto insurance would work best in your case? Look closely at what agreed value versus market value would mean for you. Even if you are fortunate enough to never be in an accident, the peace of mind provided by agreed value may be worth it to you.
