You’ve finally done it—you’re the proud owner of your very own aircraft. Perhaps you’ve even done some upgrades and you’re flying behind a recently installed glass panel and enjoying the scent of new leather upholstery.

You’ve completed your pre-flight check and are getting ready to take off. But have you thought of everything? Whether your aircraft is brand new or you’ve owned it for many years, have you verified that you would be fully covered in the event of a loss?

Photo credit: GI 275 / GNS 430W & 530W Garmin International

Understanding Agreed Value Insurance

When you initially insured your aircraft, your insurance broker may have asked about the value at which you want to insure it. If you’ve never dealt with agreed value insurance, this question might be new to you.

While most people are familiar with “actual cash value” insurance (the type you would purchase for a car or truck), agreed value stipulates that the value agreed upon will be the amount paid in the event of a total loss. Actual cash value insurance is based on depreciation, whereas agreed value is not.

Agreed value insurance is common for higher-value items, such as aircraft, classic car collections, and jewelry. These items typically don’t depreciate on the same scale as other assets do and may have a higher sentimental value to their owners. The agreed value amount is paid regardless of the value of the aircraft at the time of the loss.

Resources for Determining Aircraft Value

There will be a range of values to consider for a particular model due to different available configurations. For example, the insured value range of a 1975 Cessna 172 could be anywhere from $25,000 to $125,000. The range is intentionally broad and allows you to select a value that most closely reflects your configuration. Insuring outside of this range is possible but requires documentation on the basis for that amount.

So, how do you know what value to tell your broker?

Choosing a…