If you're having trouble following the link Steven provided here's the important part of that article:
Stated Value is coverage that reflects an amount that is “stated” at the onset of the policy. You tell your insurer what your car is worth (with proper documentation) and it is insured for that amount. The caveat here, however, is that the insurance company can choose to pay you either the Stated Value or the Actual Cash Value, whichever is less.
Alternatively, Agreed Value, coverage primarily offered by specialty insurers, is based on the proven value of your car as determined by you and the insurance company, according to appraisals, photos, or other relevant documentation. With Agreed Value coverage, the insurance company will guarantee that they will pay this agreed-upon value in the event of a covered total loss.
If you own a classic or collector car that is maintaining or increasing in value, Agreed Value is the best option to consider, or you risk losing out significantly if you have an accident. It’s important to note that most standard insurance companies do not typically offer Agreed Value, unless they partner with a specialty provider.
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Agreed value is the best way to go.
With stated value you are paying for coverage "up to" the amount of the policy. So your coverage has an upper limit, but no lower limit. The insurance company will decide whether to pay the stated value or something less based on their valuation of your car when you make the claim.
With agreed value they will pay the agreed upon amount for a total loss. No more, no less. No haggling over the condition and market value of your car at the time of the claim.
I know that Grundy offers agreed value policies. I assume there are also other companies doing that. Be sure to pay attention to the details. There is a world of difference between these two policy types.
Steve
"Agreed" is better but it doesn't change the way in which the company will operate.
Generally a company will pay up to 75% of the "actual cash value" to repair the car without totaling it out. If they "total" the car they will pay up to 90% of the value and offer it to you to keep with a flat number buy back less the deductible on the car. Sales tax on that number is also involved.
All you are doing with agreed is stating in advance what the basis number is going to be. They don't necessary accept current auction numbers. They have their own "value assessors". Some companies have their own internally. Most of the big companies pay for outside companies to get a value. That way you can't argue with them over the derived value number.
I have State Farm on my 68 GT350. Fortunately I haven't had a claim. Premiums aren't based on 2% of the "stated value". They are much less and they send my Agent out to take pictures of the car annually to verify the condition.
I do know someone that has the same policy on his Pantera in California. He has hit a deer for the second time. He told me State Farm "was great" on both claims and paid for everything. The key probably is that the car wasn't "totaled".
The cost in the shop was $35,000, for a front fender and a hood.
There always is going to have the potential of a disagreement with any company. Companies that use independent adjusters are going to pay more generally speaking since they get paid a fee based on a percentage of the claim rather then have an employee that works for them to settle claims.
I asked my SF agent which policy I have. He hasn't been able to get an answer from Corporate for the last four years.
The other thing to consider is what kind of parts the company will pay for. Original NOS or current aftermarket.
Like I said, one policy is better then the other but it doesn't necessarily settle anything at claim time unfortunately.
Incidentally, I recently was introduced to a new term from them never heard before by me. Electable. Certain items that have been added to the car that it was not originally built with they will not pay for.
I suppose that might mean if you added Webers, 10 spokes, Magstars or maybe a wood Shelby steering wheel could be categorized in that way?
In my case, SF will not pay for "electables". That effects the determination of the 'actual' cash value of the car. So you can't increase that in their eyes.
I'm not sure how that would effect a buy back though since in effect if they were reimbursing you for that then those items would have to be a consideration?
Why would you tell them to keep the car and not get paid for the 10 spokes vs.
steel wheels? You would be giving them to the insurance company for free?
A deer recently ran into my Audi TT and in determining the actual cash value of the car, the electable term came up. They wouldn't consider things like an $1,100, Forge intercooler,or a Frankenturbo as increasing the value because they are "electables".
I'm still trying to find the deer's insurance company. $8,500, in damages for basically a left front fender, a bumper cover, a hood and a left headlight. Good thing it wasn't the Pantera for sure?
Dealing with them always raises your risk of a stroke I think?