Stated value vs replacement cost?

I have a vehicle owned by Dale Earnhardt. The actual amount the vehicle is worth is much more than the Kelley Blue Book value. My agent says I need to insure it for the stated amount. What does that mean? I want to make sure my vehicle is properly insured.

Stated value coverage is typically used for vehicles worth more than their Kelley Blue Book value, like classic, custom, or collectible cars. It's the amount your insurance company uses to calculate your premium, but it's not necessarily what they'll pay you if the vehicle is totaled. Most stated value policies pay out the lesser of the stated amount or the vehicle's actual cash value at the time of loss. That means you could end up with a smaller payout than you expect, even if you're paying premiums based on the higher stated value.

If you want a guaranteed payout instead, ask your agent about agreed value coverage. With agreed value, you and your insurer settle on the vehicle's worth upfront (often backed by an appraisal), and that's the amount you're paid if it's totaled, no depreciation or ACV calculation involved. Regular valuation tools, like KBB or Edmunds, aren't the best fit for a car like this; it can't account for something called provenance, which is the 'proof' behind the value. Essentially, provenance shows the evidence of who owned it, which is where the added value of your car is coming from. To get agreed value established, you'll need to have documentation (the provenance) of Dale Earnhardt's ownership. Specialty insurers like Hagerty, Grundy or Chubb may offer agreed value for this vehicle if it isn't something your current insurer can cover.

Given the possible value of your car, I'd ask your agent directly whether your policy is written as stated value or agreed value, since the two terms get used loosely and the difference matters a lot at claim time. For more, check out our guide to agreed value vs. stated value insurance.