Agreed/Stated Value vs. Actual Cash Value

For a classic car or a restored boat, the whole point is that it has gone up in value, not down. Yet a standard policy pays as if it is just an old vehicle. How the value is set at the start decides what you collect at a total loss.

At a glance

Agreed/Stated Value vs. Actual Cash Value — At a glance
	Agreed / Stated Value Agreed	Actual Cash Value (ACV) ACV
What it covers	A dollar figure for a specific vehicle, boat, or collectible, established in writing when the policy is issued	The replacement cost of the item minus depreciation for age, wear, and condition at the time of loss
When it applies	At a total loss, a true agreed value pays the set amount without deducting depreciation	At a total loss, the insurer estimates current market value and subtracts depreciation
Typical cost	Often lower for collector vehicles because use is limited by mileage caps and pleasure-use terms	Standard vehicle or watercraft rating; the payout basis falls as the item depreciates
Key limits or exclusions	Requires photos, an appraisal, or documentation; may cap annual mileage and restrict daily use	Payout drops each year with depreciation, and disputes over condition are common
Best suited for	Classic cars, restored boats, and collectibles whose value is stable or rising	Everyday vehicles and property that lose value predictably as they age

Depreciation is the whole story

Under Actual Cash Value, the insurer decides what your item is worth at the moment it is destroyed, then subtracts depreciation. For a mass-produced vehicle that works reasonably well. For a 1967 Mustang or a lovingly restored sailboat, it can badly understate what you would actually pay to replace it, because market value is treated as a downward slope.

An agreed value policy settles that argument in advance. You and the insurer agree on a number - backed by an appraisal or photos - and that is what gets paid at a covered total loss, with no depreciation deducted. The tradeoff is upfront documentation and, on collector policies, real restrictions such as mileage limits and no daily commuting.

Agreed value and stated value are not the same thing

Watch the wording. A true agreed value pays the scheduled amount. A stated value or stated amount policy often pays the lesser of the stated figure or actual cash value - meaning depreciation can still creep back in at claim time. Read the loss settlement clause, not just the label.

Where to find it in your policy

Your Declarations page

Confirm the value shown next to the vehicle or vessel and whether the settlement basis reads Agreed Value, Stated Value, or Actual Cash Value.

The loss settlement clause in the policy form

This condition states how a total loss is paid; look for language on whether depreciation is deducted and whether the lesser-of wording applies.

The appraisal or schedule on file

Agreed value depends on documentation; verify the appraisal date and amount match the value on the Declarations.

What it looks like on a real claim

Example 1 — A restored classic car is totaled

A 1969 muscle car with a professional appraisal at $60,000 is destroyed in a garage fire. A price guide lists a base model at $28,000.

Agreed / Stated Value

Agreed value pays the full $60,000, matching the appraisal on file

Actual Cash Value (ACV)

ACV pays roughly $28,000 based on market value, ignoring the restoration premium

Example 2 — A ten-year-old boat sinks

A well-kept fishing boat originally $40,000 is a total loss after a storm. Ten years of depreciation apply under an ACV policy.

Agreed / Stated Value

Agreed value pays the scheduled $30,000 agreed with the insurer

Actual Cash Value (ACV)

ACV pays around $18,000 after subtracting depreciation for age and use

The bottom line

Choose agreed value when the item is worth more than a depreciation table would suggest - a restoration, a collectible, or anything with a rising market. The key task is a solid appraisal and honest photos; that documentation is what makes the agreed number stick at claim time.

The classic mistake is buying a policy labeled stated value and assuming it behaves like agreed value. If the loss settlement clause says lesser of stated amount or ACV, depreciation can still shrink your check. Verify the exact wording before you rely on it.

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