ChatGPT · New Zealand
If my car is written off, how does agreed value or market value change what I get paid?
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?Car insurance: How to make a 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 guideCar insurance FAQ
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 valueIf your vehicle is insured for agreed value, the agreed value may change at renewal
For more detail, see Consumer NZ's car insurance guide and the government's car insurance guidance.
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.
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Captured 11 October 2026