The fundamental difference between market value and agreed value lies in how your total-loss payout is calculated and how much certainty you have. Agreed value is a fixed amount determined between you and your insurer when you buy the policy; it stays locked for the entire 12-month term regardless of daily vehicle depreciation. Market value calculates your payout based on what your exact car was worth on the open market immediately before it was stolen or written off, factoring in age, kilometers, and current condition. Because market value fluctuates downward with depreciation, it usually commands cheaper monthly or annual premiums.
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