Market Value vs Agreed Value Car Insurance NZ 2026: Get Best Value
When your car is written off or stolen, the way your insurer calculates your payout decides whether you walk away with enough to replace it. Two terms drive that calculation in New Zealand: market value and agreed value. Both appear on policy schedules across nearly every major NZ insurer, and the wrong choice for your situation can leave you thousands of dollars short.
In this guide, we explain how each option works, which NZ insurers offer which, and how to choose the right cover for your vehicle. Run a free Quashed Market Scan to compare car insurance quotes and payout options across NZ insurers in under two minutes.
What is the Difference Between Market Value and Agreed Value Car Insurance?
Market value pays you what your car was worth at the moment of the loss. Agreed value pays a fixed amount that you and your insurer set when the policy was issued or renewed.
Three terms appear across NZ car insurance policies, and they are easy to confuse. Here is the clear distinction:
Sum insured: The maximum amount the insurer will pay you in a total loss. Both market value and agreed value policies use a sum insured on the schedule.
Agreed value: A fixed dollar amount you and your insurer agree on at policy inception or renewal. On an agreed value policy, the agreed value is your sum insured, and that is what you receive in a total loss (less excess and any outstanding premium).
Market value: The insurer's open-market valuation of your car at the time of the claim. On a market value policy, the insurer pays whichever is lower at claim time: the assessed market value of your car or the sum insured on your schedule (less excess and any outstanding premium).
Feature | Market Value | Agreed Value |
When the value is decided | At the time of the claim | At policy inception or renewal |
What you receive | The lower of the assessed market value or the sum insured | The agreed value on your schedule |
Effect of depreciation | Payout drops as your car ages | Locked in for the policy term |
Typical premium | Generally lower | Generally higher |
Where it appears | Most commonly on third party, fire and theft cover. Also used on some comprehensive policies | Most commonly on comprehensive cover |
Important: All payouts are reduced by your excess and any outstanding premium for the policy year before the money reaches you.
Which NZ Insurers Offer Market Value vs Agreed Value Cover?
Most major New Zealand insurers default to agreed value on comprehensive car insurance, with market value most commonly found on third party, fire and theft policies and some commercial vehicle cover. Terminology can vary between insurers, so always check your policy schedule rather than the brand name. As at March 2026, this is how the major NZ insurers sit:
NZ Insurer | Comprehensive Cover Type |
AA Insurance | Agreed value |
AMI | Agreed value |
AMP | Agreed value |
Assurant | Market value |
Autosure | Agreed value |
Cove | Agreed value |
MAS | Choice of agreed value or market value |
Provident | Choice of agreed value or market value |
State | Agreed value |
Tower | Choice of agreed value or market value |
On Third Party, Fire & Theft policies, the fire and theft component is typically paid at market value across NZ insurers. Market value is also the standard on some commercial vehicle policies.
How Do You Compare Market Value and Agreed Value Cover in NZ?
Start by checking your current policy schedule to confirm which type of cover you hold and what your sum insured is. Then compare quotes across the market. Run a free Quashed Market Scan to compare car insurance quotes from AA Insurance, Tower, AMI, State, Cove, AMP, Assurant, Autosure, Provident, and more in under two minutes.
Each result tells you whether the policy is agreed value or market value at a glance: if the sum insured shows as a specific figure (for example, $10,501), the cover is agreed value. If it shows “Up to” that figure (for example, “Up to $10,501”), the cover is market value. That makes it easy to compare insurers on a like-for-like basis without combing through every policy wording.
Based on our latest Q1 2026 Quashed Index data, Kiwis who shopped their comprehensive car insurance with the Quashed Market Scan found a cheaper policy 81% of the time, with average savings of $377 per year. With the average comprehensive premium in NZ now $1,267 per year (see our Average Car, House, and Contents Insurance Cost NZ 2026 guide), a couple of minutes spent comparing is well worth it.
How Does Market Value Car Insurance Work in NZ?
Market value cover pays the insurer's assessment of your car's worth at the moment of the claim, capped at the sum insured on your schedule. Insurers use independent third-party valuation data when settling a market value claim, with the assessment based on make, model, year, kilometres, and condition.
The catch is depreciation. A car loses value the moment you drive it off the lot, and continues to lose value year on year. If a total loss occurs late in the policy term, the insurer pays the lower of the assessed market value or your sum insured, not the figure your car was worth when you bought the policy. New cars are particularly exposed, since they can lose 15 to 25 per cent of their value in the first 12 to 24 months alone.
Worked example. You buy a 2025 car for $32,000 and insure it on a market value policy with a sum insured of $32,000. Your excess is $500 and your annual premium is $1,600, paid monthly at roughly $133 per month. Eleven months in, the car is written off. You have paid $1,467 of the $1,600 premium, with $133 outstanding. The insurer's independent valuer assesses the car at $26,000, reflecting roughly 19% depreciation in the first year of ownership.
Assessed market value: $26,000
Less excess: minus $500
Less outstanding premium: minus $133
Your payout: $25,367
The sum insured on your schedule was $32,000, but market value cover pays whichever is lower at claim time. Depreciation alone cost roughly $6,000 of the payout you might have expected.
How Does Agreed Value Car Insurance Work in NZ?
Agreed value cover locks in your payout amount when your policy is issued or renewed. You receive that figure if your car is written off or stolen, less your excess and any outstanding premium. You do not get to pick any number you like. The insurer reviews the value you nominate and either accepts it, counters with their own figure, or caps the cover at what they consider reasonable.
Worked example. You insure a 2013 Toyota Aqua at an agreed value of $13,000 with a $500 excess. Your annual premium is $1,100 and you pay monthly at roughly $92 per month. Ten months in, the car is written off. You have paid $920 of the $1,100 premium, with $180 outstanding for the remaining two months.
Agreed value: $13,000
Less excess: minus $500
Less outstanding premium: minus $180
Your payout: $12,320
If you carry an agreed value policy, review the figure at each renewal against current Trade Me, Turners, and dealer listings. Insurers adjust agreed values annually, and as covered in our Trade Me Cars NZ 2026 guide, some customers have reported steep downward adjustments at renewal that left them under-insured.
Market Value vs Agreed Value: Pros and Cons
Pros of market value cover
Premium is typically lower than agreed value for the same car.
Suits older vehicles that have already taken the steepest part of the depreciation curve.
Cons of market value cover
Your payout drops with depreciation, year after year.
New cars are heavily exposed in the first 12 to 24 months, when depreciation is fastest.
You do not know the exact payout figure until after the loss.
Pros of agreed value cover
Certainty: you know exactly what you will receive in a total loss before any incident.
Protection against depreciation during the policy term.
Helps align the payout with a car loan balance, reducing the risk of being left owing money on a written-off car.
Cons of agreed value cover
Higher premium than market value for the same car.
You need to review the agreed amount at each renewal, or you risk being under-insured if the insurer's automatic adjustment drops the figure too far.
Related Reading
Trade Me Cars NZ 2026: Listing Prices VS Insurance Payouts — Why the Gap Could Cost You Thousands. How Trade Me asking prices and insurer valuations differ, and how to set your sum insured correctly.
ANZ Car Insurance NZ 2026: Review, Quote, & Claims Process. A full breakdown of ANZ's Asset Protector cover, including how agreed value and market value apply across cover tiers.
Comprehensive vs Third Party Fire & Theft vs Third Party (Full NZ Breakdown). How the three cover tiers compare, and how each interacts with market value and agreed value.
Average Car, House, and Contents Insurance Cost NZ 2026. The latest Quashed Index figures on what Kiwis are paying across all three policy types.
Cheap Car Insurance NZ 2026: Proven Ways to Lower Your Premium. Practical, proven tips to bring premiums down without sacrificing the cover you need.
Frequently Asked Questions
Is agreed value or market value better for car insurance in NZ?
It depends on your car. Agreed value gives certainty: you know your payout before any incident. Market value typically lowers your premium but exposes you to depreciation. Newer cars and financed cars often suit agreed value because the depreciation risk is highest. Older common vehicles already past the steepest part of the depreciation curve can suit market value, where available.
What is the difference between sum insured, agreed value, and market value?
Sum insured is the maximum payout shown on your policy schedule. On an agreed value policy, the sum insured is the agreed value, and that is what you receive in a total loss (less excess and any outstanding premium). On a market value policy, the sum insured acts as a ceiling: the insurer pays whichever is lower at claim time, the assessed market value of your car or the sum insured on the schedule.
Do NZ insurers let you set any agreed value you want?
No. You nominate a figure, and the insurer either accepts it, counters with their own assessment, or caps the cover at what they consider reasonable. Insurers tie agreed values to independent third-party market data and will not let you over-insure significantly above that level.
Does my agreed value stay the same every year?
Usually not. NZ insurers review the agreed value at each renewal based on third-party valuation data. The figure typically drops year on year as your car depreciates, which also reduces your premium. If you disagree with the renewal figure, you can challenge it using evidence from Trade Me, Turners, and dealer listings for comparable vehicles.
Can I switch from market value to agreed value mid-policy?
Many major NZ insurers do not offer both options on the same comprehensive policy, so switching usually means changing insurer at renewal. Tower, MAS, and Provident are exceptions in offering both at quote time on comprehensive cover.
How can I tell if a policy is agreed value or market value when comparing on the Quashed Market Scan?
Check the sum insured shown under each Quashed Market Scan quote. If it displays a specific figure (such as $10,501), the cover is agreed value, and that is what you receive in a total loss (less excess and outstanding premium). If it shows “Up to” that figure (such as “Up to $10,501”), the cover is market value, and the insurer will pay the lower of the assessed market value or that ceiling. This lets you compare cover types side by side without opening every policy wording.
What happens to my modifications under each policy type?
Declare modifications when you take out or renew your policy. Undeclared modifications will not be included in your payout under either cover type. Some insurers also exclude or restrict certain modifications altogether, so check the policy wording before adding aftermarket parts.
