Agreed Value Cover: All you need to know

Written by Stuart Craig on 13th August 2020

There are times when the regular insurance cover for your caravan, motorhome or campervan isn’t suitable. You may feel that getting back what you paid is the most important thing in the event of a total loss.

What’s the answer? Agreed value cover is insurance which could be more suitable for you. Read on to learn more.

What is Agreed Value Cover?

The agreed value insurance (sometimes referred to as the “guaranteed value”) provides for the following in the event of a total loss: an amount that you and the insurer have already agreed.

For example, a caravan covered under the agreed value allows you to receive the whole amount in the policy statement in the event of a loss.

Why is that different from regular insurance cover?

Regular cover is better described as ‘market value cover.’

With a market value insurance policy, when you buy a caravan the vehicle gradually drops in value. That’s also known as ‘depreciation.’ The value of the caravan three years after you bought it will be less. You will always lose the VAT element of a new caravan as soon as you drive it away.

If you have an accident and your caravan is damaged as such, your insurer will give you the market value of the vehicle at the time.

Agreed value coverage is different.

Your insurer will give you the value agreed at the start of the policy. In other words, there’s no depreciation in the value.

Is agreed value or market value better?

Whether to buy an agreed value cover policy or a market value policy depends on what you own and what you need.

When to choose agreed value cover

Agreed value cover is ideal when you have a caravan or where you want more control of its value should you have an accident and write it off.

Another example for when to consider this cover is if you have a fairly unique caravan. That might be a modified unit you can’t buy anywhere else.

When to choose market value cover

Market value insurance cover might seem less appealing than agreed value coverage. But, market value cover is a popular type of insurance for caravan owners.


Price. Premiums can be lower on market value policies. That makes the policies attractive to owners who need to budget carefully.

Agreed value cover policies can carry higher premiums due to the payout you get should you write your vehicle off.

How is agreed value determined?

agreed value cover price

You need to know the value of your vehicle because it can affect your new for old value and the replacement value. Looking at the market value of your vehicle can help you figure out what your caravan is worth. You should also know what the buy-new value is on the market.

Assuming you are in possession of a receipt or proof of purchase from a recognised UK dealer that is less than 5 years old, you can agree to insure your caravan for the amount shown in your Evidence of Insurance. That’s irrespective of the age of the caravan, or whether it is new or secondhand (provided the sum insured is no more than the price you paid).

Who Offers Agreed Value Cover?

Not all insurers offer agreed value cover insurance. You’ll need to do some research to check which insurance companies can help and provide a quote.

Nonetheless, agreed value coverage is a worthwhile and helpful insurance if you own a vehicle which is unusual or hard to replace.

Agreed value cover can bring many benefits to your insurance policy. An agreement on this cover will save you trouble in the future. If you follow this guide, buying insurance for your vehicle will be an easier process.

For more information on agreed value cover for caravans, contact us today!

Looking for a related product?

Caravan Insurance

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Campervan Insurance

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Motorhome Insurance

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