How do agreed value and actual cash value motorcycle policies differ?
Motorcycle policies that include comprehensive and collision coverages usually base the limits of these coverages according to an “agreed value” or a “actual cash value” amount.
Agreed value normally provides coverage up to a predefined amount, which is agreed upon when the policy is purchased. Actual cash value usually covers up to the fair market value of the bike at the time that it’s damaged.
Actual cash value policies are suitable for the vast majority of motorcycles. When there’s special considerations due to a bike’s age, rarity or customization, however, an agreed value policy might be preferable.
An experienced insurance agent can help riders determine which of these two options they want, if getting comprehensive and collision coverages.