When you call an insurer about covering your $55,000 build, you’ll hear two terms repeatedly: agreed value and stated value. They sound similar. The gap between them — when it matters most, at claim time — can be tens of thousands of dollars.

Understanding the difference between these two valuation methods is one of the most important things a modified car owner can do. It determines not just how much you’re paid after a total loss, but whether you’ll be made whole at all.

Agreed Value Insurance: How It Works

Under an agreed value policy, you and your insurer agree — in writing, at policy inception — on the exact value of your vehicle. This figure is called the agreed value or insured value. It represents what the insurer will pay you in the event of a total loss, without deductions, depreciation adjustments, or arguments about market value.

The process works like this:

1. You provide documentation of your car’s value — purchase price, modification receipts, professional appraisal if applicable
2. The insurer reviews your documentation and either accepts or proposes a revised agreed value
3. Both parties sign off on the agreed value, which is written into the policy declarations page
4. If the car is totalled, you receive exactly that amount, minus any applicable deductible

The key word is agreed. Both sides have committed to the number before anything happens. There is no ambiguity at claim time. Hagerty, Grundy, and other specialist modified car insurers use agreed value as standard because it’s the only approach that makes sense for vehicles whose value is determined by their modifications, not their model year and mileage.

Stated Value Insurance: The Critical Difference

Stated value sounds similar but operates very differently in practice. Under a stated value policy, you declare the value of your car (the “stated value”), and the insurer notes this figure. However, the policy wording typically contains a clause that pays whichever is lower: the stated value or the actual cash value (ACV) at the time of loss.

Actual cash value is calculated using standard depreciation schedules — the same formulas used for standard auto policies. For a modified car, this calculation is deeply problematic:

• Depreciation schedules assume the car loses value over time, which is the opposite of what happens to well-built collector and performance vehicles
• The base vehicle’s age and mileage are weighted heavily, while modifications are valued conservatively or excluded entirely
• The insurer’s adjuster, not you, determines ACV at the time of the claim

“We’ve seen stated value policies pay out 40–60 cents on the dollar for modified vehicles. The owner thought they were covered at $65,000. The adjuster calculated ACV at $28,000 and that’s what was paid.” — Insurance industry veteran, quoted in Hemmings Motor News

A Real-World Comparison

Consider two owners with a 1969 Camaro, each investing $55,000 in a full restomod build: LS3 swap, modern brakes and suspension, custom interior, paint, and tuning.

Owner A has an agreed value policy at $55,000. The car is totalled in a garage fire. Owner A receives $55,000 minus their $500 deductible: $54,500.

Owner B has a stated value policy with $55,000 stated. The same fire totals the same car. The insurer’s adjuster calculates ACV using depreciation tables applied to a 1969 Camaro: base vehicle market value is estimated at $18,000 (a stock 1969 Camaro in similar condition), and modifications are valued at a conservative $9,000. ACV: $27,000. Owner B’s policy pays out $27,000 — less than the cost of the engine alone.

This is not a hypothetical edge case. It’s a predictable outcome of how stated value policies are written, and it’s why collector and modified car specialists uniformly recommend agreed value coverage.

How to Identify Which Policy Type You Have

Confusingly, some insurers use “agreed value” in their marketing while their policy wording contains stated value or ACV provisions. The only reliable way to know is to read the actual policy document, specifically:

• The declarations page — look for “agreed value,” “guaranteed value,” or “stated value” in the coverage description
• The loss settlement clause — this is the provision that governs what happens at total loss. Look for language like “whichever is less” (bad) or “the agreed value shown in the declarations” (good)
• The definitions section — how does the policy define “agreed value”? Some policies define it as agreed-at-inception (good) while others define it as a ceiling on ACV claims (bad)

If you’re unsure, ask your insurer in writing: “In the event of a total loss, will I receive exactly the insured/agreed value stated in my declarations page, regardless of the vehicle’s current market value or depreciation?” A genuine agreed value policy will yield an unequivocal yes.

Agreed Value for Partial Losses

One important nuance: agreed value typically applies to total loss claims. For partial loss (damage that doesn’t total the vehicle), both agreed value and stated value policies generally pay the cost of repair, subject to the deductible. The agreed value distinction becomes critical primarily at total loss.

However, modification coverage for partial losses matters too. Under a specialist policy with a full modification schedule, repairs that damage covered modifications are reimbursed at the cost to restore the modification. Under a standard policy, that aftermarket supercharger damaged in an accident is simply not covered.

What Agreed Value Costs

The premium difference between an agreed value and a stated value policy from the same insurer is typically 10–20% on the annual premium. On a $1,400/year base premium, that’s $140–$280 extra per year for the guarantee that you’ll be paid in full after a total loss.

For most build owners, this is an easy decision. The downside risk of a stated value policy — receiving half or less of your build’s value after a total loss — far outweighs a few hundred dollars per year.

Specialist insurers including Hagerty, Grundy, and American Collectors offer genuine agreed value as their standard product. Compare their policies and pricing →