One of the most common questions drivers in Malaysia have when they want to renew or get car insurance is: Should I cover my car based on Market Value or Agreed Value?
Both choices are definitely asked when renewing your car insurance, but knowing the difference between them may help you make a better choice and ensure you obtain the correct protection if anything occurs to your car that you didn’t expect.
What is market value car insurance?
The Market Value is the amount of money your car would be valued on the open market right now if it were lost or damaged. It’s the amount of money your car may be sold for immediately before it is stolen or damaged. There are a few main factors that determine the market price of a car: model, age, and mileage.
For example, if you bought a car for RM 80,000 three years ago, it would have depreciated significantly. It could now be worth about RM50,000 on the market since it has lost value through depreciation. If your car is ruled a total loss from accidents or stolen, the insurance compensation would be based on this RM50,000 (market value), not the amount you paid for it.
Pros:
Usually comes with a lesser premium because the value is smaller.
Shows prices in real time.
Cons:
Over time, depreciation lowers the amount you get.
The sum might change based on the car’s age, condition, and market trends.
Sometimes, the payoff may not be enough to buy a car that is the same model as yours.
What is agreed value car insurance?
With an Agreed Value policy, you and the insurer agree on the amount of coverage at the start of the term.
Even if the market value of your car goes up or down, this sum will remain the same throughout the policy term.
For instance, you and your car insurance company agree to pay RM80,000 to cover your car for a year. You will get the whole RM80,000 if the car is stolen or written off as a total loss, even if the market value lowers to RM50,000 later.
Pros:
The compensation amount is set and guaranteed.
You can relax since you know exactly what you’ll get if you lose everything.
Great for new cars, expensive cars, or cars that have been carefully taken care of and keep their worth.
Cons:
The premium can be a little greater than what the policy is worth on the market.
| Feature | Market Value | Agreed Value |
| Coverage Basis | Based on the current market price at the time of loss | Based on pre-agreed amount |
| Payout | May be lower due to depreciation | Fixed and guaranteed |
| Premium | Usually lower | Slightly higher |
| Certainty of Claim Amount | Depends on market conditions | Transparent and predetermined |
| Best For | Older vehicles or budget-focused drivers | Newer cars, premium vehicles, or those seeking stability |
Why Most Key Plus Customers Prefer Policies Based on Agreed Value
Claim Amounts That Are Easy to Guess
If your car is stolen or totalled, you’ll know exactly how much you’ll receive—no surprises or last-minute changes. This is unlike market value coverage, which can fluctuate based on depreciation and current demand.
More protection for your money
You don’t lose value on your claim because of depreciation, which makes it easier to get a new car.
Peace of Mind for Customers
A lot of drivers feel better knowing that their car has a certain insured value, especially if it’s a newer or more expensive model.
Trust and Openness
From the beginning, everything is apparent with Key Plus. You talk about and write down the agreed value ahead of time, so you always know how much your car is really worth to the insurance company.
Final Thoughts on Market Value vs Agreed Value
When deciding between Market Value and Agreed Value, think about how much assurance and consistency you desire in your insurance.
If you want certainty, openness, and fair protection, Agreed Value is often the best option. That’s why Key Plus organises most of its vehicle insurance contracts this way. While Key Plus primarily offers Agreed Value policies, we understand that every driver’s needs and budget are different. Depending on the type of vehicle, premium range, or market situation, we may switch between Agreed Value and Market Value options to ensure the policy remains fair, practical, and affordable for our customers.
You might also be interested in our How to Check NCD in Car Insurance article.