Stated Amount

Stated amount is a coverage option used primarily for classic cars, collector vehicles, boats, aircraft, and other items whose value is difficult to determine by standard appraisal at the time of a loss. Instead of relying on book value or an appraiser's opinion after the loss, you and the insurer agree in writing to a fixed dollar figure -- the stated amount -- when the policy is issued. That figure represents the maximum the insurer will pay in the event of a total loss.

It is important to understand what stated amount does and does not guarantee. In most stated-amount policies, the insurer still pays the lesser of the stated amount or the actual cash value at the time of loss. This means if your 1967 Mustang is insured for a stated amount of $45,000 but the adjuster determines its ACV at the time of loss is only $38,000, you receive $38,000. You are not guaranteed $45,000 just because that is the figure on the policy declarations. This is a common point of confusion and a source of disputes at claim time.

Agreed value coverage (sometimes called guaranteed value) is the more protective alternative. Under agreed value, the figure set at policy inception is what you receive in a total loss, period -- no ACV deduction, no adjuster reappraisal. Agreed value requires a formal appraisal up front, and the premium reflects the agreed figure rather than a depreciated estimate. For classic cars, rare motorcycles, or collector items that actually appreciate in value over time, agreed value is the appropriate coverage; stated amount is a compromise that can leave you undercompensated if values have risen since the policy was written.

If you insure a collectible or specialty vehicle, ask your agent explicitly whether the policy is stated amount or agreed value, and read the loss settlement clause carefully. The premium difference between the two is often modest, but the financial difference in a total loss scenario can be substantial -- particularly for vehicles whose market value has risen since the policy was written.