You’ve compared quotes, locked in your preferred car insurer and cover level, and finally feel ready to click through. Then you run into one more decision: Agreed Value or Market Value? While these options might sound similar, they can make a difference to your payout if you ever need to make a car insurance claim.
To help clear up some common confusions among Australian drivers around whether agreed or Market Value is better – and what the actual difference is between these two car insurance terms – we’ve pulled together this handy guide.
“‘Should I choose Market Value or Agreed Value?’ is a question we often hear from vehicle owners seeking a quote for insurance with Youi,” says Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle. “The short answer is it’s very much about your personal preference and individual circumstances.”
“Having said that, deciding on whether to insure your car for Agreed Value or Market Value and understanding the difference between the two are key when you’re shopping around for the best car insurance for your needs.”
What’s the difference between Market Value and Agreed Value?
Essentially, Market Value is an estimate of what your car is worth immediately before an incident that led to a claim, based on market conditions at that time. Agreed Value, on the other hand, is a fixed amount you and your insurer decide on when the policy starts, regardless of how the market changes.1
“When taking out a car insurance policy, you’ll typically need to choose whether you want cover for the Market Value or Agreed Value of your vehicle, and that choice affects how much you’re paid if your car is written off as a total loss or stolen and not recovered,” explains Jackson.
Here’s a more detailed breakdown.
Agreed Value
In the insurance world, Agreed Value is the fixed amount you and your insurer agree to cover your car for at the time you take out the policy. That figure is valid for the full 12-month policy term and determines the amount you’ll be paid out if your car is written off as a total loss or stolen.
For example, if your car’s Agreed Value is $25,000 and your vehicle is deemed a total loss after an insured event, your insurer will pay you $25,000, minus any deductions such as your excess or the year’s remaining premium.2
“At Youi, Agreed Value is the amount we agree to cover the car for at the time of loss and that includes any accessories and modifications fitted or made to your car, other than for disability – you can add that on separately,” says Jackson.3
“While the premium offered for Agreed Value is often higher than the one offered for Market Value, it may be similar in some instances. It’s all dependent on the stipulated Agreed Value.
“Youi has parameters for Agreed Value policies and the customer selects a value from within the range offered.”
Here are some further points to consider with Agreed Value:
- Agreed Value premiums are typically higher than Market Value because the Agreed Value for your car is often more than what it would sell for at the time it was damaged or stolen.1
- It’s common for the Agreed Value to reduce each time you renew your policy because cars generally depreciate each year.2
- An Agreed Value option is often only available with comprehensive car insurance.1
“With an agreed car value, there are no surprises – and knowing how much money you’ll receive if your car is declared a total loss can be helpful if you’re still paying it off,” says Jackson.
Market Value
Market Value is how much your car would be worth if it was sold on the open market right before the incident that led to you making your insurance claim. Your insurer, not you, will determine what the Market Value of your car is, by taking into account a range of factors such as:1
- Age and condition of the vehicle
- Make and model
- Service and accident history
- Kilometres travelled.1
“At Youi, Market Value means the reasonable and expected cost of replacing the car with a car of the same or similar make, model, mileage and condition, immediately before an incident covered by your policy. It includes any factory-fitted accessories and an allowance for any after-market accessories or modifications you’ve told us about.”
Here are some other important things to note about Market Value:
- It generally doesn’t include any warranty costs, future stamp duty or transfer fees or allowance for dealer profit.
- Premiums are usually lower if you insure for Market Value.1
- You don’t control how much your car is insured for and can’t be certain what your payout will be.1
Should I insure my car for Agreed or Market Value?
There’s no one-size-fits-all answer. The right choice depends on how you use your car, what it’s worth to you, and how much certainty you want at claim time – so it may be worth weighing up both options carefully before deciding.
We’ve summarised the key differences between Agreed Value and Market Value in the Table below.
| Feature | Agreed Value | Market Value |
| How value is set | You and insurer agree on a car value upfront (within approved limits) | The value is assessed at the time of loss, based on market prices at the time |
| Changes over time | Fixed for the policy term | Can rise or fall as the market changes |
| Payout | You know how much you’ll receive in a total loss | Depends on what your car is worth at the time of loss |
| Premium impact | Often costs more | Usually lower |
For an indication of how your car insurance premium might differ depending on whether you choose Agreed Value or Market Value, it may be helpful to seek multiple quotes to compare agreed and Market Value premiums for your specific vehicle.
How do insurers decide the Market Value of my car?
If you choose to insure your car for Market Value, your insurer will decide the value of your vehicle based on established industry resources. These can include organisations that continuously research the car market and use the latest data to price and value used cars, such as RedBook, and carsales.
“When you make a claim, your insurer’s qualified assessors will use industry price guides to determine the Market Value of your vehicle immediately before the accident or theft, taking into account a range of factors, such as the year, make and model, mileage and condition of your car,” explains Jackson.
Using vehicle Market Value calculators
As we’ve seen, your insurer will calculate the Market Value of your vehicle at the end of the day, but there’s nothing to stop you doing your own research using online calculators to help approximate your vehicle’s Market Value.
Some online calculators that may be helpful include:
Furthermore, the Financial Rights Legal Centre reminds policy-holders that they can always query the Market Value allocated to their vehicle by an insurer, by obtaining an independent valuation or seeking advertisements for comparable vehicles.2
Can I switch between Agreed Value and Market Value mid-policy?
At Youi, you can typically switch between Market Value and Agreed Value – and vice versa – mid-policy. However, in some cases, this may only be something you can do when you renew your policy or take out a new car insurance policy. Check with your insurer to find out whether you can switch now, or whether you need to wait until policy renewal time. It’s also important to note that if you make a claim, your insurer will apply the insured value that was active on your policy at the time of the incident.
How do I know what my Agreed Value is?
As a general practice – and at Youi – if you’ve taken out a car insurance policy and decided on an Agreed Value, you’ll find that Agreed Value amount noted in your policy document.
If you’d like to learn more about your car insurance options, consider contacting Youi to see if there’s a policy that’s right for you. For answers to some more frequently asked questions, take a look at our car insurance page.
1 Source: Canstar – Car Insurance Market Value vs Agreed Value, April 2025
2 Source: Financial Rights Legal Centre – Car Insurance Claim, January 2025
3 Available with Comprehensive policies. For full details, see the Car PDS.
4 Source: RedBook – RedBook Valuation Report
5 Source: CarsGuide – What is the Market Value of My Car? Free Car Valuation Calculator & Price Guide
6 Source: Drive – What’s my car worth
7 Source: carsales – Get a free online car valuation in minutes
