01 / The meaning
What it means.
Motor policies commonly offer this valuation basis. Unlike a market-value assessment made by reference to the loss date, an agreed amount is established in advance for the relevant period. However, the number can change at renewal. The original purchase price, finance balance and practical replacement cost may each be different from the current agreed value.
Check whether the arrangement applies only to a covered total loss or also affects partial damage calculations. Excesses and other deductions may still apply, and accessories or modifications may need separate description. An agreed figure does not make excluded damage covered or guarantee that the same amount continues indefinitely. Review the schedule at each renewal and obtain clarification if the amount no longer reflects the purpose for which the asset is insured.
02 / Put it in context
A practical example.
Hypothetical example: a business insures a delivery vehicle on an agreed-value basis and later adds specialised shelving. At renewal it checks the new agreed figure and whether the modification is included, rather than assuming the original amount and description remain unchanged.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Confirm the current agreed amount and the losses to which that basis applies.
- Check excesses, deductions and treatment of accessories or modifications.
- Review the amount at renewal against asset needs and any finance obligations.
04 / Start a useful conversation
A question for your broker.
For which losses does this agreed value apply, and what could still reduce or prevent a payment under the policy?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
Let’s start with your business
A clearer conversation
about your insurance.
Tell us what you do, what has changed and what you need to understand.