MOTOR INSURANCE VALUES

Before You Compare the Price, Understand What You Are Buying

Corsa Dynamics is often asked which motor insurer or policy is best.

We do not recommend insurers or insurance products. A better starting point is to decide what you expect your policy to provide—and then check whether the policy wording supports that expectation.

Terms such as Market Value, Agreed Value, Amount Covered, Sum Insured and Insured Value can sound similar but may operate differently. A dollar figure shown on your policy may be a fixed settlement basis, an insurer-assessed value at the time of loss, or simply the maximum amount payable.

This guide explains the common descriptions and the questions worth asking before purchasing or renewing motor insurance.

Common Vehicle-Value Descriptions

Market Value

The vehicle’s value is assessed by the insurer at or immediately before the insured incident. The insurer may consider age, condition, kilometres travelled, local market information, modifications and accessories.

What is included—such as registration, compulsory third-party insurance, transfer costs or dealer-related costs—depends on the particular policy definition.

Agreed Value

A dollar amount agreed between the policyholder and insurer, usually from within a range offered by the insurer. It generally applies for the policy period but may change when the policy is renewed.

Check the agreed value on every renewal notice rather than assuming it remains unchanged.

Amount Covered

A set amount shown on the policy certificate. Some insurers use this expression instead of agreed value and describe it as the maximum they will pay for loss or damage to the vehicle.

Check whether it is the settlement basis or simply the maximum payable.

Sum Insured

The dollar amount recorded for the vehicle. Depending on the policy, it may be an agreed value or a limit applied to the vehicle’s market value.

The term alone does not establish how a total-loss payment will be calculated.

Insured Value

A collective term used by some insurers to refer to whichever valuation basis applies—commonly market value or agreed value. The policy schedule should identify which basis has been selected.

A Dollar Figure May Be a Limit—not a Guaranteed Payment

Some policies allow the policyholder to select a sum insured from within an accepted range. Selecting a lower amount may reduce the premium because it limits the insurer’s maximum exposure.

A similar choice may apply to the excess: accepting a higher excess can reduce the premium but increases the amount the policyholder may need to contribute when making a claim.

The premium saving should therefore be considered against the potential financial shortfall at claim time.

Some policies settle a total loss using the lower of the vehicle’s market value or its stated sum insured.

Example 1

Sum insured: $50,000
Market value at the time of total loss: $35,000
Settlement basis before applicable deductions: $35,000

Example 2

Sum insured: $50,000
Market value at the time of total loss: $80,000
Settlement basis before applicable deductions: $50,000

A higher sum insured does not necessarily mean the full amount will be paid if the vehicle’s market value is lower. Conversely, selecting a sum insured below the vehicle’s market value may reduce the premium but also cap the settlement.

This differs from a policy where the stated figure is genuinely the agreed value for the policy period.

The important question is not simply, “What dollar figure appears on my policy?” It is, “How does the policy say that figure will be applied?”

Questions Worth Asking Before You Buy or Renew

Before comparing premiums, ask:

  • Is the vehicle covered for Market Value, Agreed Value, Amount Covered or another basis?

  • Is the dollar figure shown a fixed settlement basis or only the maximum payable?

  • If market value applies, how does the policy define it?

  • Does the value include modifications, accessories and permanently fitted equipment?

  • Are registration, compulsory third-party insurance or other on-road costs included?

  • Can the insured amount be changed during the policy period?

  • Will the amount automatically change at renewal?

  • What excesses and other deductions may apply to a total-loss settlement?

  • Does a new-vehicle replacement benefit apply, and what conditions must be satisfied?

  • If a lower sum insured or higher excess reduces the premium, what financial shortfall are you accepting?

You do not need to predict every possible claim. The objective is to understand what the policy promises before deciding whether its price represents value to you.

Similar Cover May Be Described Differently

Australian insurers do not all use the same terminology. Current examples include:

  • AAMI, GIO and Suncorp: Amount Covered or Market Value

  • NRMA, RACV, Youi and Budget Direct: Agreed Value or Market Value, depending on the product

  • Allianz: Agreed Value under Comprehensive and Market Value under Comprehensive Essentials

  • Shannons: Agreed Value for its enthusiast and specialist motor cover

  • Youi: Insured Value as a collective description for the agreed-value or market-value basis shown on the policy schedule

  • NRMA and some commercial or specialist policies: Sum Insured as the recorded vehicle amount or applicable payment limit

These examples help identify commonly used descriptions. They are not comparisons, rankings or recommendations.

Policy terms can change, and an existing customer may hold an earlier policy version. Always check the PDS, policy schedule and certificate applying to the particular period of insurance.

Information reviewed August 2026.

Can’t Find the Term Your Insurer Uses?

Insurance terminology continues to change, and different products from the same insurer may use different descriptions.

If your policy uses another vehicle-value term, you can send us:

  • The insurer’s name

  • The policy or product name

  • The term used

  • The relevant PDS wording or a screenshot with personal information removed

Corsa Dynamics will review the wording and may add it to this guide so the resource remains current and useful.

We can explain how assessment and vehicle-value terminology is being used. We do not recommend insurers or insurance products, and any meaning must be confirmed against the PDS, policy schedule and certificate applying to the particular policy.