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The agreed value of a motorcycle refers to how much money an insurance company and a policyholder agree that the bike is worth in the event of a total loss or theft. This is the amount of money you will receive from the insurer if your ride is stolen or destroyed beyond repair.

An excellent example of this issue involves the 1953 Indian Chief my family used to own. We bought it from the local junkyard and did a complete restoration. Since only about 350 were ever built, the rarity creates extra value from an insurance standpoint.

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Then there’s the fact that it came with a 1,300cc engine. It can get up to about 100 miles per hour on a good day, which is fantastic for a bike over 60 years old.

It’s such a famous motorcycle that there is even one in the National Motorcycle Museum.

The current retail is about $35,000 if you want one. If you decide to sign on the dotted line, you’ll need to speak with your preferred insurer about the agreed-upon value of your policy.

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Why Is Agreed Value an Essential Consideration?

Unlike the market value of a motorcycle, which is determined by the current market trends and supply and demand, the agreed value of a bike is determined through negotiation between the policyholder and the insurance company.

The agreed value is usually determined when the insurance policy is purchased, and it may be reevaluated periodically to ensure that it still accurately reflects the motorcycle’s worth.

Several factors can affect a bike’s agreed-upon value, including its make and model, age, condition, and any modifications or customizations.

Generally, the more valuable the motorcycle is, the higher the agreed value will be.

Here are some types of custom bikes you may not have heard of.

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What Are the Benefits of Having an Agreed Value Insurance Policy?

The primary advantage that comes with an agreed value for a motorcycle is that it delivers more control and certainty to you over a potential payout.

In the event of a total loss or theft, a policyholder will know exactly how much money they will receive from the insurance company, which can be particularly important if they have invested a significant amount in customizing or upgrading their motorcycle.

This approach also protects you from the effects of depreciation, even if you have a classic bike that tends to increase in value. You’ll work with the insurer to agree on a set value that doesn’t decrease over the life of the policy.

It should be noted that these benefits do make most policies more expensive than other insurance types for motorcycles. You will usually need to provide evidence of value, such as a receipt for your modification or upgrade.

Although the cost can be more, an agreed value policy is perfect for a 1953 Indian Chief or another make and model with rarity and customization. When requesting a motorcycle insurance quote, be sure to provide any supporting info you have to agree on how much coverage should be available.

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Mike Navarette has more than a decade of experience in the auto insurance industry, but that's not his true passion. He loves getting on a motorcycle to explore roads he's never traveled. You'll find Mike in the garage working on something when he isn't helping clients or leaning into curves. It's sometimes a side hustle, more often a favor, but it keeps his hands busy doing something productive. Since the first time his father strapped on his helmet and took him for a ride, Mike has loved bikes. That passion, along with a desire to help others through a deep understanding of insurance policies, led to the creation of Motorcycle Ride Coverage.

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