Agreed value vs market value for caravan insurance

When comparing caravan insurance, it's easy to concentrate on the annual price and forget about how the caravan itself is valued.

But agreed value and market value can make a big difference if your caravan is stolen or written off.

What is agreed value?

Agreed value means you and the insurer agree on an amount for the caravan when the policy starts or renews.

That amount is usually shown on your policy schedule.

If the caravan becomes a covered total loss, the agreed value is generally the starting point for the settlement, subject to the policy terms, excess and any other amounts that can be deducted.

The insurer normally won't let you choose any number you like.

It may set limits or ask for information supporting the value.

What is market value?

Market value is worked out around the time of the claim.

The insurer may consider things such as:

• make and model
• age
• condition before the loss
• specifications
• comparable caravans
• accessories and modifications where relevant

The exact definition of market value is set out in the policy.

This means you don't necessarily know the final figure until the claim is assessed.

Is agreed value better?

Not automatically.

Agreed value can give you more certainty about the insured amount.

That can be attractive if you have:

• a higher-value caravan
• significant modifications
• an unusual model
• a caravan that's difficult to value
• finance still owing

But the premium may differ depending on the value and insurer.

The important thing is to compare the certainty and cover you're getting, not just assume one option is always better.

What if I have modifications?

This is particularly important for caravans.

Solar, batteries, suspension, awnings and other upgrades can add a lot of value.

Tell the insurer about them.

With agreed value, check whether they're included in the amount shown on your schedule.

With market value, check how the insurer treats modifications when working out the caravan's value after a claim.

What if I still owe money on the caravan?

Check your finance balance against the amount the caravan is insured for.

If a caravan is written off and money is owed to a lender, the insurer may need to pay the lender first.

Insurance doesn't automatically guarantee that the settlement will clear every dollar you owe.

Don't assume the purchase price, loan balance and insured value are the same thing.

What is new-for-old replacement?

Some policies offer new replacement benefits for eligible newer caravans.

This is different again from agreed or market value.

There can be conditions around:

• how old the caravan is
• whether you bought it new
• whether you're the first registered owner
• whether the same or a similar model is available

Read the conditions rather than assuming every new caravan will automatically be replaced with a new one.

Check your value when the policy renews

Don't assume the insured value stays the same forever.

Caravan values change.

So do:

• modifications
• accessories
• condition
• market prices
• the amount of finance you owe

When the renewal arrives, check the insured value as well as the premium.

What should you compare?

When comparing caravan insurance, look at:

• agreed or market value
• the actual insured amount
• what modifications are included
• contents
• new replacement benefits
• excess
• premium
• total-loss conditions
• any deductions that may apply

That gives you a much better picture than comparing premiums alone.