If you own a classic or collector car, you’ve likely heard the terms “agreed value” and “stated amount” thrown around when discussing your classic car valuation on your insurance policy. While they might sound similar, the difference between these two valuation types could mean thousands of dollars in your pocket (or back in it!) when you need to file a claim.
As an independent insurance agency specializing in classic car coverage, we’ve seen a lot of misunderstandings in car enthusiast communities about how to insure them. Let’s break down what you need to know to protect your investment properly.
What is Agreed Value Coverage?
Agreed value coverage is exactly what it sounds like: you and your insurance company agree on your classic car’s value upfront, and that’s what you’ll receive if your vehicle is declared a total loss—regardless of depreciation or market fluctuations.
Here’s how it works:
- You provide documentation of your car’s value (appraisals, receipts, photos) – sometimes this might be required, but collector car insurers often understand the market already and may not require any documentation at all if the vehicle is largely unmodified and falls within a standard range for the model.
- The insurance company reviews and agrees to that value
- This agreed amount is written into your policy
- In a total loss, you receive the full agreed value (minus your deductible)
Key Benefits:
- Guaranteed payout: No haggling with adjusters about your car’s worth
- No depreciation: Your classic’s value is locked in, even if the market dips
- Peace of mind: You know exactly what you’ll receive in a total loss and can protect your investment
What is Stated Amount Coverage? (And Why You Should Avoid It)
Here’s where many classic car owners get burned: stated amount coverage sounds protective, but it’s actually paying additional premium to limit coverage rather than enhance it.
The stated amount trap:
- You declare your car’s value and pay higher premiums based on that amount
- The insurance company sets this as the maximum they’ll pay
- In a total loss, they pay the lesser of: the stated amount OR the actual cash value at the time of loss (guess which number typically prevails)
- You’re stuck with standard ACV coverage despite paying extra
It gets worse: If your car’s value rises but you don’t increase the stated amount, you may actually limit your coverage to less than what the ACV would otherwise be. You’re literally paying extra to potentially receive less coverage.
Real-World Example: Paying More to Get Less
Consider a 1987 Buick Grand National owner with stated amount coverage of $30,000:
Scenario 1: Market crashes, ACV drops to $20,000
- Payout: $20,000 (you paid extra premium for nothing)
Scenario 2: Market rises, ACV increases to $40,000
- Payout: $30,000 (you’re capped at the stated amount you forgot to update)
Either way, you paid additional premium but received no additional benefit; and instead potentially limited your coverage.
Our Recommendation: Skip Stated Amount Entirely
At Palmetto Choice Insurance Agency, we don’t recommend purchasing stated amount coverage for any reason whatsoever unless it’s the ONLY option. It’s a policy feature that increases your premium while working against your interests.
Instead, choose between:
- Agreed Value: Predictable protection with guaranteed payouts
- Standard ACV: Wider eligibility requirements, but you accept market risk
Don’t fall for the stated amount middle ground—it’s the worst of both worlds.
Which Coverage Should You Choose?
Choose Agreed Value If:
- Your car is appreciating or has appreciated significantly
- You’ve invested heavily in restoration or modifications
- You want certainty about claim payouts
- Your car is truly irreplaceable or rare
Choose Standard ACV If:
- Your car is more of a daily driver than a limited-use classic
- You’re comfortable with market risk
- You are at odds with policy limitations or requirements, such as restrictions on where/when the car can be driven, or don’t have the appropriate storage.
When is Stated Amount Appropriate?
Normally this is not something for you to seek out as an insured, as it does not serve your best interest, with one exception. The most common use of Stated Amount is to limit an insurance carrier’s exposure to risk on a high-value vehicle, particularly if the value may become volatile or hard to judge. By using Stated Amount, an underwriter can limit the carrier’s risk on a valuable vehicle, thus making the prospect of insuring it more appealing to the insurance company. In practical terms, it may allow you to obtain SOME coverage when otherwise you would not be offered any coverage at all, not even standard ACV.
What Documentation Do You Need?
Oftentimes, specialty insurers are well-versed in market trends, or they may have their own classic car valuation guidelines. In many cases, if the vehicle is close to original, there may be a valuation range that the insurer will automatically approve. However, once you involve extensive modifications or especially rare vehicles without much resale precedent, it may be more difficult to determine a value. For agreed value coverage for less common or highly modified vehicles, insurers may require:
- Professional appraisal (sometimes required every 2-3 years)
- Photos of the vehicle (interior, exterior, engine bay, undercarriage, etc)
- Receipts for restoration work or modifications
- Documentation of comparable sales
The Bottom Line
Don’t let insurance companies sell you stated amount coverage that increases your premium while limiting your protection. Your classic car deserves real coverage, not expensive limitations.
At Palmetto Choice Insurance Agency, we work with a variety carriers to find the right agreed value coverage for your classic car. We understand that your vintage ride isn’t just transportation; it’s an investment, a passion project, and often a piece of family history.
Questions About Your Classic Car Coverage?
Don’t leave your classic car valuation and protection to chance. Whether you’re insuring a numbers-matching muscle car, a modern classic or import, or a modified street rod, we’ll help you understand your options and secure coverage that actually protects your investment, not limits it.
Contact Palmetto Choice Insurance Agency today:
- Phone: (864) 707-1234
- Email: info@palmettochoice.com
- Visit: 970 Howard St, Spartanburg, SC 29303
Serving classic car enthusiasts throughout South Carolina and North Carolina with honest advice and competitive rates.