One of the most important decisions when buying comprehensive car insurance is whether to insure your car at Agreed Value or Market Value. Getting this wrong can cost you tens of thousands of ringgit if your car is written off.
Market Value Insurance
Market value insurance pays you what your car is worth on the open market at the time of the total loss claim — based on current depreciated value, not what you paid for it.
Example: You bought a Myvi for RM70,000 five years ago. Its market value today is RM35,000. If your car is written off, you receive RM35,000 — not RM70,000.
Market value premiums are lower, but coverage shrinks each year as your car depreciates.
Agreed Value Insurance
Agreed value (also called "insured declared value" or IDV) lets you set a specific insured amount at the start of the policy. If your car is written off, you receive the agreed amount.
Example: Same Myvi, but you insured it at RM55,000 agreed value. If written off, you get RM55,000.
Premiums are higher, but coverage is more predictable and typically more generous.
Which Should You Choose?
- New or near-new cars: Agreed value — depreciation is steepest in first 3 years
- Cars with outstanding loans: Agreed value — ensure coverage exceeds loan balance
- Older cars (7+ years): Market value is often sufficient and premiums are meaningfully cheaper
- Modified or upgraded cars: Agreed value — market value won't account for your modifications
Don't Under-Insure
If you choose agreed value, don't set it too low to save on premiums. If your insured value is significantly below market value, your payout will be proportionally reduced in some policies (the average clause). Always insure at or above current market value.