When you insure your four wheel drive, you can either insure it for market value or agreed value. Market Value is more common, and many insurance companies don’t even offer Agreed Value. The difference though, is very important to think about. Market Value means that the value of your car drops as time goes by. For example, if you purchase a $30k four wheel drive it will depreciate (or become worth a little less each year). If you insure the four wheel drive under Market Value and have an accident 5 years later, you could find that the vehicle is only insured for $15k.
Agreed value however, does not change. If you stipulate you want the vehicle insured for $30k then that is what it will be worth in 1, 2 or 10 years time. The advantage of doing this is that over time most people who own four wheel drives spend money doing them up. It can be very difficult to get insurance companies to cover your four wheel drive accessories to the value that they are worth. For example, if you spend $5k doing your vehicle up, you will likely have a hard time getting it insured for 5k more (even though logically it should be). Many people spend much more than that – by the time you have purchased some bar work, roof racks, spotlights, a winch, suspension upgrade, engine modifications and upgrade exhaust, fridge and other camping gear you have well and truly blown the 5k budget.
Of course, you are likely to pay more for agreed value insurance, but this is something you need to consider. Generally if you are happy with the value your vehicle is insured at and you are willing to let it depreciate naturally then there is nothing to worry about. However, there are a lot of people that would rather the insurance valuation of the car stays the same – it is an agreed value. Be aware that the market value can actually be less than what you would expect to pay for your vehicle, just because of the way that insurance companies work this out.
Some insurance companies will not insure your vehicle for more than what you paid for it, and you often have to work hard to get them to add the value up in your accessories. Insurance is a very important part of four wheel driving, and needs to be taken seriously. Take the time to find a policy that is suitable for what you want and you won’t have any issues.