When insuring a luxury, exotic, or classic car, understanding Agreed Value versus Actual Cash Value (ACV) coverage is essential to protect your investment.
Actual Cash Value policies pay out based on your vehicle’s depreciated market value at the time of a loss. This means insurers deduct for wear and tear, mileage, and market trends—often resulting in a payout far below what your car is truly worth. For luxury vehicles that retain or even increase in value, ACV coverage can leave you significantly underinsured.
Agreed Value policies, on the other hand, offer a predetermined payout amount, agreed upon by you and your insurer when the policy is written. This ensures you receive the full insured amount without depreciation, offering peace of mind and true financial protection.
For owners of rare, collectible, or high-end cars—whether it’s a classic Ferrari, a limited-edition Lamborghini, or a custom Rolls-Royce—Agreed Value coverage is the superior choice. It reflects your car’s real value and protects against unexpected financial loss.
In short, if your vehicle is unique or holds significant value, don’t settle for less—opt for Agreed Value to safeguard your investment properly.