There are many choices when it comes to auto insurance. One that you may not know a lot about is known as agreed value car insurance. Before making any decisions, it pays to learn more about this option. Here are four questions that people often have about agreed value coverage when they first hear about it.
How Long Does the Agreed Value Remain in Effect?
One of the distinguishing characteristics is that the agreed value named in the policy will remain in effect for the entire insurance term. In many cases, it will carry from one term to the next. This means that factors like depreciation will not impact the base figure used if the car is involved in a covered event.
For example, you have agreed value coverage and your car is totaled in an accident. The event occurred in the middle of the term. Rather than relying on the current market value of the car at the time of the accident or using the replacement value, you will receive a figure based on the agreed value.
Can I Approach the Insurance Company About Adjusting the Agreed Value?
The amount of agreed value coverage is determined by the customer and the insurance company. At the time the policy was entered into, both parties agreed to the value. It remains in place until one party or the other wants to revisit that figure.
As the current term is about to end, you have the option of going back to the insurance company and asking to make a change in that value. If the provider is open to the idea, it may be possible to come to agreement on a new figure, and implement it when the new term begins. Keep in mind that the provider can also approach you about changing the value for the upcoming term.
What Factors Would Motivate a Change in the Agreed Value?
There are compelling reasons to revisit the figure used in the agreed value car insurance policy. One has to do with changes in the market value of the insured vehicle. For example, if you own a classic or antique vehicle that has appreciated in value, it makes sense that you would want to increase the amount of coverage.
When you need to reduce your insurance premiums, it’s also an option to approach the insurance company and decrease the coverage amount. This is not an unusual decision, especially for people who may need to cut expenses for a short time. Remember there’s always the option to change the agreed value again once your financial situation improves.
Who Can Make Use of This Type of Auto Insurance?
Some people will tell you that this type of auto coverage is only for those who own vehicles that are considered classics, antiques, or that have been modified or enhanced in some manner. All of these are good candidates for agreed value coverage, but they are not the only ones.
The fact is that anyone can opt for this type of coverage. Whether or not it would be a better choice for you is something that’s best determined by you and the insurance provider. You may find that there’s no real benefit when you’re talking about the late model (but not classic) vehicle that you drive to work every day.
Is agreed value insurance something you want to know more about? Talk with your agent and find out how the plans work. Ask for a quote and compare it to insurance based on market value. It won’t take long to determine what works best in your case.