Introduction
Many drivers get confused when insurance mentions Market Value or Agreed Value. Both are coverage types, but they calculate compensation differently. Choosing the wrong one may result in receiving less than your car’s actual value in case of damage or total loss. This article explains the differences, provides simple examples, and offers tips on choosing based on vehicle value — including panel insurers under BJAK like Allianz, Takaful Malaysia, and P&O Insurance.
What Is Market Value
Market Value is the car’s market price at the time of loss.
It is determined based on:
- Vehicle age
- Model
- Condition
- Current market price
- Suitable for older cars or cars whose market value fluctuates easily.
Example:
5-year-old car: Market Value RM25,000 → if total loss, insurance pays RM25,000.
- Advantage: usually cheaper premium
- Disadvantage: payout can decrease if the market falls
What Is Agreed Value
Agreed Value is the value agreed between the owner and insurer when the policy begins.
- Suitable for new cars or imported/rare models.
- Full payout is guaranteed even if the market falls.
Example:
New car RM100,000 → Agreed Value RM100,000.
If total loss within 1 year → insurance pays RM100,000 even if the market drops to RM95,000.
- Advantage: compensation is certain
- Disadvantage: premium is usually higher
Market Value vs Agreed Value: Quick Comparison
| Feature | Market Value | Agreed Value |
| Premium | Cheaper | More expensive |
| Payout | Based on market price | Based on agreed value |
| Suitable For | Older cars / fluctuating market | New cars / imported / rare models |
| Risk | Payout may decrease if market drops | Payout fixed as agreed |
Tips for Choosing Coverage
- New cars (1–3 years): Agreed Value is usually safer.
- Older cars / stable market value: Market Value is more economical.
- Check BJAK panel insurers: Allianz, Takaful Malaysia, and P&O Insurance offer both types.
- Consider NCD & roadtax: factor in total annual insurance costs before selecting coverage.
Conclusion
Understanding Market Value and Agreed Value is key to receiving fair insurance compensation. Choose the type that matches your car, premium budget, and overall protection strategy. BJAK makes it easy to compare and get quotes from selected panel insurers, helping you make smart decisions.
Read More:
Car Roadtax Malaysia: Old vs New, Differences, Rates & Smart Ways to Save
How to Transfer NCD Insurance Between Vehicles in Malaysia
How to Use a Car Insurance Calculator to Compare Insurance Companies
