Agreed value vs market value for vessels?

Definitions of market value and agreed value:

Market value definition

Market value refers to the value of your vessel on the open market. Market value takes depreciation into account as well as the condition of the boat and its model. For example if you have an accident and your vessel is written off, the market value is the original price you paid for the boat at the time and therefore is the replacement value of your vessel. This value is updated regularly and will go down as your vessel ages.

Agreed value definition

Agreed value refers to the price/ value of your vessel that has been agreed between you and your insurer. This value will be reviewed every time you renew your insurance.

How to make the “right” choice

This decision depends on your individual requirements. If your vessel is reasonably new and modern then it is advised to work with your insurance broker to work out its value and choose an agreed value policy. This will have an affect on your insurance premium which will be higher than for a market value policy.

The majority of people tend to select a market value policy because it keeps their premiums down and because they know any payout in the event of a write-off will be in line with the actual market value of the vessel at the time, which can be a good option if the boat is older.

The pros and cons of market value


  • It’s usually cheaper
  • Your sum insured is automatically updated to the standard market value
  • You avoid paying more than you need to
  • It’s typically more convenient


  • Your vessels market value might be less than you think
  • A well-maintained vessel might be undervalued according to the market value
  • In the event of a claim, your payout may be considerably lower than an agreed value policy

The pros and cons of agreed value


  • You know exactly how much you are insured for
  • You are able to insure your vessel for less than its market value to save money
  • You are able to cover the cost of modifications, aftermarket extras and other considerations
  • You can choose your own level of cover to properly reflect the importance and value of your vessel


  • It typically costs more
  • It requires some form of valuation
  • Restrictions may apply to the age, value or type of vessel that can be insured

In conclusion, there are both positives and negatives of choosing either a market or agreed value policy and you will need to weigh them up and decide on the best solution for you and your vessel. If you have additional questions or and need any further guidance, get in touch with our marine expert, Darren Harris.

Darren Harris Dip CII
Account Executive
[email protected]
0117 930 1687 | 07785 426 630