# B-T10-M-03: If my car is written off, how does agreed value or market value change what I get paid?

Collected 11 October 2026

[Car insurance study](https://nzbrands.ai/research/insurance/car-insurance)

## ChatGPT

Answer ID: 7e43006e-21fb-40f4-8e08-c2bab84c9da3

In New Zealand, the key difference is whether your insurer pays an agreed amount set in advance or the car’s market value at the time it’s written off.

If your car is written off after an accident, theft or another covered event, that difference can mean thousands of dollars in your payout.

## Agreed value vs market value

|  | Agreed value | Market value |
| --- | --- | --- |
| How payout is calculated | Based on the insured value agreed with your insurer | Based on the car’s value immediately before the loss |
| Amount you can expect | Usually the agreed amount, subject to your policy terms | What the insurer determines the car was worth at the time |
| Can it change over time? | Yes, if your policy renews with a different agreed value | Yes, as the car’s value changes |
| Main risk | The agreed amount might be lower than the car’s current replacement cost | The insurer’s valuation might be lower than you expected |
| Best thing to check | Your current policy’s agreed value | How the insurer calculates market value |

Both types of cover are subject to your policy wording, including any excess, exclusions and write-off conditions.

## A worked example

Imagine your car is written off and your policy has a $500 excess.

Scenario: agreed value is $15,000, but market value is $12,000

Agreed value payout

# $14,500

$15,000 less $500 excess

Market value payout

# $11,500

$12,000 less $500 excess

Difference: $3,000

You would receive $3,000 more under agreed value in this example, assuming both policies apply those terms.

These are illustrative figures, not a quote or guaranteed payout. Actual settlements can also deduct outstanding premiums or other amounts allowed under the policy. [With car insurance, what is the difference between market value and agreed value?](https://www.asb.co.nz/help/with-car-insurance-what-is-the-difference-between-market-value-and-agreed-value.html)[Car insurance: How to make a claim](https://www.consumer.org.nz/money/insurance/car-insurance/car-insurance-what-it-covers-and-how-to-claim)

## How is market value worked out?

The insurer generally assesses what it would reasonably cost to replace your car with a comparable vehicle immediately before the loss. Factors may include:

- Make, model and year.
- Odometer reading and overall condition.
- Specifications, accessories and modifications.
- Prices of comparable vehicles on the New Zealand market.

If you think the insurer's valuation is too low, ask for its valuation report and challenge it with evidence such as comparable listings and a professional valuation. [Car insurance buying guide](https://www.consumer.org.nz/money/insurance/car-insurance/guide)[Car insurance FAQ](https://www.vero.co.nz/faq/car-insurance-faq.html)

## Which should you choose?

- Agreed value: gives you greater certainty about the insured amount during the policy period.
- Market value: ties the payout to the car's assessed value at the time of the loss, rather than a previously agreed figure.

One important detail: an agreed value isn't necessarily fixed forever. Your insurer may adjust it at renewal, so check the current policy schedule. Also check whether your policy offers new-car replacement or other benefits that could change the settlement. [Understanding agreed and market value](https://www.aainsurance.co.nz/blog/simplifying-insurance/agreed-and-market-value)[If your vehicle is insured for agreed value, the agreed value may change at renewal](https://suminsured.vero.co.nz/documents/personal-insurance/motor-policy-document-online-december-2025.pdf)

For more detail, see Consumer NZ's [car insurance guide](https://www.consumer.org.nz/money/insurance/car-insurance/guide) and the government's [car insurance guidance](https://www.consumerprotection.govt.nz/help-product-service/cars/paying-registering-insuring-car/car-insurance).

## Want to work out what you'd receive?

If your car has already been written off, I can help estimate the payout difference.

What is your car's year, make and model, and is your policy agreed value or market value? If you know the insured amount and excess, include those too.

## Gemini

Answer ID: 24ff0242-f5e5-482d-913d-4baf7b85cbad

When your car is written off (declared a total loss), the choice between **agreed value** and **market value** completely changes how your insurance payout is calculated. 

---

### 1. Agreed Value Payout
* **How it works:** You and your insurer agreed on a fixed dollar amount for your car when you bought or renewed your policy (this is stated on your policy schedule). 
* **The Payout:** If your car is written off, you receive that exact set figure, regardless of whether second-hand car prices have dropped since you took out the policy (minus your excess and any outstanding payments).
* **The Process:** It generally speeds up the claims process because the payout amount is pre-determined. Insurers typically review and adjust this value downward slightly at each annual renewal to account for standard depreciation.

### 2. Market Value Payout
* **How it works:** Your car is insured for what it is reasonably worth on the New Zealand market *immediately before* the accident happened.
* **The Payout:** The insurer assesses the current retail value based on your car's exact make, model, year, mileage, overall condition, and pre-accident maintenance. 
* **The Process:** This usually requires a valuation report or market research into what similar vehicles are selling for locally. Because vehicles depreciate continuously, a market value payout late in your policy year can often be lower than you expect.

---

### Key Differences at a Glance

| Feature | Agreed Value | Market Value |
| :--- | :--- | :--- |
| **Payout Amount** | Fixed, guaranteed sum stated in your policy. | Estimated retail value right before the crash. |
| **Speed of Claim** | Usually faster (no need to argue over what the car was worth). | Can take longer as the insurer investigates current market prices. |
| **Depreciation Risk** | Protected; you know the minimum/exact payout you'll get. | Exposed; if market prices drop, your payout drops with them. |
| **Cost** | Generally comes with a slightly higher insurance premium. | Usually results in a cheaper insurance premium. |

### What is actually deposited in your bank?
Regardless of whether you have an agreed or market value policy, insurers will deduct a few standard items from your final payout:
1. **Your excess:** The amount you agreed to pay out-of-pocket for any claim.
2. **Outstanding premium:** If you pay your insurance yearly, they may deduct the remainder of that year's premium, or if you pay monthly, any remaining balance for the term.
3. **On-road costs:** Occasionally, unpaid registration or Road User Charges (RUC) if applicable to your settlement terms.

Would you like help deciding which type of cover makes more sense for the specific make and age of your vehicle?

## AI Overviews

Answer ID: b7f29f23-69ca-4d00-ae11-f3378e252731

If your car is written off in New Zealand, choosing **agreed value** guarantees you receive a fixed, locked-in payout amount that you negotiated with your insurer beforehand, whereas **market value** means your payout will match what the car was worth on the open market right before the accident occurred.

The policy type you select dictates your financial certainty, your premium costs, and how much you ultimately take home after a total loss.

* * *

Core Comparison

Feature| Agreed Value| Market Value
---|---|---
**Payout Amount**| **Fixed sum** stated on your policy certificate (minus your excess).| **Variable amount** based on NZ depreciation and market data at the time of the crash.
**Predictability**| High. You know exactly what you will get paid if a write-off occurs.| Low. Payout fluctuates depending on vehicle age, mileage, and condition.
**Premium Cost**| Typically higher, as the insurer takes on more risk by guaranteeing a set amount.| Usually lower, as the value decreases over time along with the car's depreciation.
**Best For**| Classic cars, modified vehicles, or cars under a finance agreement where you need to guarantee a specific payout.| Standard everyday vehicles, older commuter cars, or if you simply want to minimize monthly premiums.

* * *

Hidden Mechanics & NZ Deductions

Regardless of whether you choose agreed or market value, your final cash payout will usually be lower than the raw valuation due to standard insurer deductions in New Zealand:

 * **Policy Excess:** Your standard excess (and any applicable underage or inexperienced driver excesses) will be subtracted from the total payout.

 * **Remaining Policy Premiums:** If you pay your car insurance monthly or fortnightly, the insurer will typically deduct the remaining balance of your annual premium from your payout, as a write-off effectively cancels the 12-month contract.

 * **Vehicle Ownership:** Once the insurer pays you out for a total loss, they take legal ownership of the vehicle wreck to recoup costs via salvage.

* * *

If you are currently reviewing a policy or trying to resolve a claim, let me know:

 * The **make, model, and year** of the vehicle

 * Whether the vehicle is currently **under finance** or has **custom modifications**

 * If you are currently **disputing a valuation** given by an insurer

I can provide more targeted guidance on your options.

## Google AI Mode

Answer ID: ae5c9e76-ead2-4111-a77b-08f79335b749

When your car is written off or stolen, the difference between **agreed value** and **market value** changes how your payout is calculated, how predictable the amount is, and how long the claims process might take.

Here is how each option impacts what you get paid:

 * * **Agreed Value:** You and your insurer lock in a specific, fixed payout amount when you start or renew your policy. If your car is written off, you receive that exact pre-determined amount (minus your excess and any outstanding costs like unpaid premiums or road user charges). It does not matter if the market price of your car has dropped since you took out the policy; you get the guaranteed figure. This provides financial certainty and usually speeds up the payout, though it generally comes with a higher premium.

 * **Market Value:** Your insurer assesses what your car was worth on the open market immediately _before_ the accident or loss, taking into account its age, mileage, condition, and market demand. Because cars depreciate over time, a market value payout is typically lower than an agreed value and shrinks the longer you own the vehicle. The insurer has to source valuation reports to determine the current worth before settling, which can sometimes take a bit longer, though your regular insurance premiums are usually lower.

 *

If you want to look into this further, tell me:

 * Is your current policy **agreed value** or **market value**?
 * Are you trying to **decide which policy type to buy** or **disputing a current write-off payout**?

I can help you figure out your next steps.