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What is an Agreed Value vs Market Value in Car Insurance?

What is an Agreed Value vs Market Value in Car Insurance?

08/12/2016

If you’re uncertain on whatAgreed ValuevsMarket Valueis on yourComprehensive Car Insurance Coverage , look no further as we explain the different car insurance premiums in Malaysia with an aim to educate you on what these two mean.

If you own a car in Malaysia, you will need car insurance. The best way to have a full complete coverage would be to get aComprehensive car insurance coverage . Why? Because it is a plan that covers everything you'd need, including your own vehicle!

It is recommended to switch to aComprehensive Coverage Policyif you happen to have one of the more basic ones instead. This is where anAgreed ValuevsMarket Valueof an insured sum comes into view when your vehicle is declared a total loss or has been stolen.

What is the difference? 

Market Value

Credit: Perodua Malaysia

Market Valueas it’s name suggests is based on the calculated worth of the vehicle at the time. Assuming you have insured your 2015 Perodua Myvi at RM50,000 in January of that year, the value of the Myvi would have depreciated its value eight months later. Should you have to claim based on a total loss or theft of your car, theMarket Valuepay-out will be certainly less in August of 2015.

Agreed Value

AnAgreed Valuehowever, is an amount which has been agreed by the insurance provider based on your car’s model and year. By insuring your vehicle

with anAgreed Value , should you have to claim at an event of a total loss, the sum of pay-out will be based on your policy as the agreed value. By having anAgreed Value , there would be no risk of under-insuring or over-insuring the value of your vehicle. But as with this, insuring your car for more than what it’s worth will cost slightly more in your premium payment.

Which is better? It depends. 

Insurance and financial providers recommend insuring your vehicle based on anAgreed Valueas this provides the policyholder to claim according to an arrange value stipulated in the policy.Market Valuepolicies however could also cost you as it would depend on how much your vehicle is worth. Ultimately, insuring your vehicle based on the best cover for you should be done by a reputable company like Allianz.

It is good to have aComplete and Comprehensive Car and Motor Insurance from Allianzwhich will protect your vehicle against liabilities to other parties for injuries, accidental fire and theft of your car. On top of your car insurance, it is also best to have a reliable 24-hour roadside assistance and unlimited towing distance withAllianz’ Enhanced Road Warrior .

Being on the road is always an open book to all sorts of risks.Click hereto check out Five Steps To Staying Safe On The Road With Alice.

Also if you are looking at getting a second hand car,click herefor Five Tips When Buying 2nd Hand Cars.

This article was produced in partnership with Allianz Malaysia.


Category: Auto Insurance

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