You may be asking what is agreed value and the difference against market value when insuring your motor vehicle. Insurance company in the past provide insured coverage based on Market Value of your vehicle at time of insuring, but as time passes, your market value decreases, so what is the amount, when upon claim should the insurance company compensate you? A vehicle insured for RM100,000 at early of the year may have a market value of RM90,000 toward the end of the year.
Thus, if you insured for RM100,000 Market Value, but when submitting for claim, you may get less because at the time of claim, your market value decreases. To overcome this issue, some insurance companies (one of them is Allianz) come up with Agreed Value.
Agreed Value means that the insurance company Agrees that your vehicle insured value will be as per the agreed value throughout the year / cover period. If upon insuring for your vehicle, your sum insured is RM100,000 Agreed Value, no matter when you make a claim during the cover period, the value of your vehicle will be RM100,000.00
Most vehicle will have an agreed value when you submit for insurance, except some less common vehicle. If there is no agreed value for your vehicle, then you can only insured based on market value.
It is generally wise to insured with an agreed value, but sometime, your vehicle agreed value may be much higher that existing market value, due to the periodic update of their system. If you know your market value of your vehicle is around RM60,000 but the agreed value provided is RM75,000. You would need to make a decision then. Paying premium based on RM75,000 against RM60,000. In the event of a claim, such as minor accident, it would not affect you much. The most damaging claim would be lost or fire. If you insured under market value, the insurance company will compensate you based on your vehicle market value at the time of lost, which may be RM50,000. If you insured at Agreed Value, then despite your vehicle is actually worth RM50,000 the insurance company will have to honour their agree value and pay you RM75,000