Owning a classic car can sometimes be risky, but having the proper insurance can help protect your interests. When comparing classic car insurance policies, there are two standard terms you may come across: agreed value and actual cash value. Understanding the differences between these two terms can significantly affect your coverage and compensation following an accident in Surprise, AZ.

Differences Between Agreed Value and Actual Cash Value

What Is Agreed Value?

Under an agreed-value insurance arrangement, you and your insurance provider determine how much your vehicle is worth. This number will be the maximum amount that your provider will agree to pay after a covered loss. If you file an insurance claim, you may be entitled to the agreed-upon value or the full amount needed to fix the car. Agreed value is best suited for classic car owners who maintain or increase the value of their vehicle over time.

What Is Actual Cash Value?

In insurance, actual cash value (ACV) refers to the amount needed to replace your stolen or damaged property minus any depreciation at the time of the covered loss. This is the most commonly used method of valuation in auto insurance as it considers the real-world value of your classic car. The biggest downside of using ACV is that the payout may not always cover the cost of a comparable replacement car.

Contact Giles & Iten Insurance for Classic Car Insurance

The decision between agreed value and actual cash value will depend on many factors, such as the type of vehicle you own and how you use it. Working with an experienced insurance agent can help you determine the right valuation for your vehicle. Contact Giles & Iten Insurance in Surprise, AZ, at 623-201-8570 to learn more.