Market value and agreed value are different ways of determining how insured plant or equipment is valued.

Market value #

Market value is generally based on what the equipment was worth immediately before the loss.

Factors can include:

• Age
• Condition
• Operating hours
• Maintenance
• Previous damage
• Comparable equipment
• Attachments
• Modifications
• Current market conditions

The policy wording and scheduled amount can also affect settlement.

Agreed value #

Agreed value is an amount accepted by the insurer and recorded on the policy schedule.

This can provide greater certainty about the valuation basis for a total loss.

However, an agreed value does not mean every claim is automatically paid at the full scheduled amount.

Partial losses are generally assessed differently, and total-loss settlements remain subject to:

• Policy terms
• Excess
• Applicable deductions
• Other settlement conditions

Equipment values should be reviewed at renewal and when significant modifications or attachments are added.

Contact our team if you need help reviewing the insured values of your machinery.