Agreed Value vs Market Value: Which Protects Your Caravan Better?
- Agreed value locks in a fixed payout amount you set with the insurer at the start of the policy.
- Market value pays what your van was worth immediately before the loss — depreciation is deducted and the figure can be disputed.
- Agreed value typically costs 5–15% more in premiums, but removes all guesswork at claim time.
- If you have finance owing, agreed value is essential — a market value payout can leave you short of what you owe.
- Modifications (solar, lithium batteries, suspension upgrades) are reflected in agreed value but often ignored under market value.
- Review your agreed value at every renewal — insurers reduce it slightly each year to reflect depreciation.
Agreed value caravan insurance pays a fixed amount you lock in upfront if your van is written off or stolen. Market value pays what your caravan was worth on the open market the day before it was lost — which is always lower, often by thousands. For most Australian caravan, motorhome, and camper trailer owners, agreed value is the right call.
What Is Agreed Value Caravan Insurance?
When you take out a policy on agreed value terms, you and the insurer settle on a dollar figure at the start. That figure is what you receive if your van is a total loss — no negotiation, no depreciation deducted mid-claim, no arguments about market conditions.
The agreed value stays fixed for the entire policy year. When renewal comes around, your insurer will typically suggest a slightly lower figure to reflect another year of age. You can accept their number, negotiate a higher one (especially if you have recently spent money on upgrades), or shop around.
This approach is how most specialist caravan insurers — CIL, Let's Go, KT Insurance — operate by default. Some mainstream insurers like NRMA also offer it as an option across their caravan, motorhome, and camper trailer products.
What Is Market Value Caravan Insurance?
Market value cover pays you what a buyer would have paid for your caravan in its actual condition, on the open market, the day before the loss. The insurer calculates this using the van's age, make, model, general condition, mileage, and comparable sales data.
It sounds reasonable in theory. The problem in practice is that depreciation hits caravans hard, and the insurer controls the calculation. You can dispute their figure — and if you are not happy, you can escalate to the Australian Financial Complaints Authority (AFCA) — but that takes time and stress you do not need when you are already dealing with a total loss.
Market value policies tend to cost 5–15% less in premiums. That saving is real, but so is the gap between what you expected and what you receive at claim time.
How Agreed Value and Market Value Differ at Claim Time
Here is where it matters most. Say you paid $55,000 for your caravan three years ago and it is written off today. Under agreed value at $52,000, you receive $52,000 minus your excess. That is the number you agreed on. You know it, the insurer knows it.
Under market value, the insurer assigns a current market figure. For a three-year-old van, that might come in at $38,000 to $44,000 depending on the model and how they calculate depreciation. You have no control over that number, and it may be lower than what similar vans are actually selling for on Gumtree or caravan dealers.
Forum discussions on Whirlpool make the pattern clear. People who claim under agreed value policies very rarely complain about the payout. People who claim under market value policies often feel shortchanged — not because the insurer is necessarily wrong, but because the calculation is opaque and the result is unpredictable.
Why Modifications Make Agreed Value Essential
This is where market value cover fails caravan owners most visibly. Australian RV owners routinely spend tens of thousands customising their vans. Lithium battery systems, solar setups, suspension upgrades, custom drawers, satellite dishes — these are real expenses that add genuine value to a specific van, but they are invisible to a market valuation based on make, model, and age.
Under market value, an insurer pricing a 2019 van will compare it to other 2019 vans of the same model. Your $6,000 lithium install and $4,000 suspension upgrade count for nothing in that comparison. Under agreed value, those modifications are included in the figure you and the insurer agree on at the start — as long as you declare them accurately.
If you have spent money upgrading your caravan, camper trailer, motorhome, or fifth wheeler, agreed value is not optional. It is the only way to get a payout that reflects what you actually own.
Finance Owing: The Case for Agreed Value Gets Stronger
If you still have a loan on your van, a market value payout can land you in a difficult position. The insurer pays you $38,000. You owe $45,000 to the lender. That $7,000 gap is yours to find — even though you just lost your caravan.
Agreed value at $52,000 eliminates that risk. You know you will have enough to pay out the finance and potentially put funds toward a replacement. Some policies also include a new-for-old replacement clause for newer vans (CIL, for example, offers this for caravans purchased new within the past two years) — check your PDS for specifics.
When Market Value Might Actually Make Sense
Market value cover is not always the wrong choice. If your caravan or camper trailer is older, has no modifications, and you are comfortable with whatever its true market value is on the day of a loss, market value can work. It also suits owners who are genuinely price-sensitive and who understand the trade-off they are accepting.
Pop-tops and older camper trailers with minimal upgrades, insured by owners who track their market value carefully, can be a reasonable fit for market value policies. But this is the exception, not the rule. For most touring vans, motorhomes, or fifth wheelers — especially those over $40,000 — agreed value is the safer structure.
How Much More Does Agreed Value Cost?
Expect to pay roughly 5–15% more in annual premiums for agreed value cover compared to a market value equivalent. On a $55,000 van insured at around 1.5% of value, that is roughly $825 a year for market value versus $870–$950 for agreed value. The difference is modest — often under $150 a year — for the certainty you gain at claim time.
Premium costs across the board for caravan insurance in Australia in 2025 sit roughly at:
- Camper trailer or pop-top ($15,000–$25,000): $250–$500 per year
- Mid-range touring caravan ($30,000–$60,000): $500–$1,200 per year
- High-end or off-road caravan ($80,000+): $1,000–$3,000 per year
Agreed value adds a small margin to these figures. For most people, it is a straightforward calculation: a small extra premium each year to avoid a potentially large shortfall on a total loss claim.
How to Set the Right Agreed Value
Setting too low an agreed value is almost as bad as having market value cover. If you set $42,000 on a van you paid $55,000 for, you have essentially locked in your own underinsurance.
To set the right figure:
- Check what comparable vans are selling for on Gumtree, carsales, and caravan dealer sites
- Add the value of any modifications you have made (keep receipts)
- Do not just accept the insurer's suggested figure at renewal without checking it against the market
- If your van has appreciated (which happened to many Australian caravans during the 2020–2022 boom), push for a figure that reflects that
Your insurer will want evidence to support a high agreed value, especially on older or heavily modified vans. Photos and receipts for modifications help your case significantly.
Not sure which cover type suits your van? Run your details through our comparison tool and see which insurers offer agreed value cover — and what they charge for it.
Agreed Value vs Market Value: Quick Comparison
| Factor | Agreed Value | Market Value |
|---|---|---|
| Payout certainty | Fixed upfront | Determined at claim time |
| Depreciation impact | None during policy year | Deducted from payout |
| Modifications covered | Yes, if declared | Often ignored |
| Finance protection | Strong | Risk of shortfall |
| Claim disputes | Rare | More common |
| Annual premium | 5–15% higher | Lower |
Frequently Asked Questions
This article is general advice only and does not account for your personal circumstances. Always read the Product Disclosure Statement before purchasing any insurance product.
— The team at Compare Caravan Insurance