Agreed Value vs Stated Value Aircraft Insurance: What Pays Out

Every aircraft owner signs a policy with a number on it. That number sits on the declarations page, looks official, and gets ignored for years at a time. Then something happens on a windy runway or in a hangar during a storm, and suddenly that one number decides how much money lands in your account.

The trouble is that two very similar-sounding terms control that number. Agreed value vs stated value aircraft insurance sounds like a small wording difference. In some policies it is. In others, it is the difference between a full check and a check that comes up short by tens of thousands of dollars.

Most owners find this out at the worst possible moment. A few find out early, fix the wording, and sleep better for it.

Key Takeaways

Agreed value coverage pays the exact dollar amount listed on your policy if your aircraft is a total loss, minus your deductible. Stated value coverage can pay that same amount, but some policies allow the insurer to pay the lower of the stated number or what the aircraft was worth on the day of the loss. In aviation, the two terms are often used to mean the same thing, so the only way to know for sure is to read the valuation wording in your own policy.

Flying411 is an aviation marketplace where owners buy and sell aircraft, engines, and parts, which makes it a handy place to see what comparable airplanes are trading for. That kind of real-world pricing is exactly what underwriters want to see behind your hull number.

What Aircraft Hull Insurance Really Covers

Before comparing the two valuation methods, it helps to know which part of your policy they apply to.

An aviation insurance policy usually has two main halves:

• Liability coverage pays for injuries to other people and damage to their property.
• Hull coverage pays for physical damage to your own aircraft.

Agreed value and stated value only apply to the hull side. Liability limits work differently and are written as a dollar cap per occurrence.

Aircraft hull insurance typically covers the airframe, the engines, the propellers, and the equipment permanently installed on the aircraft. That includes your avionics stack. It usually does not cover normal wear and tear, mechanical breakdown, or gradual deterioration.

Hull coverage also comes in levels. Some owners buy ground coverage only. Others buy ground and taxi coverage. Most buy all-risk coverage that includes flight. The broader the coverage, the higher the premium.

Good to Know: Your hull number is not a coverage limit in the usual sense. On a total loss, it is the exact amount the insurer owes. On a partial loss, it is the ceiling for repairs and the benchmark used to decide if repairing is even worth it.

Deductibles on hull policies are usually split into two types. One applies while the aircraft is in motion. The other applies while it is parked or hangared. The not-in-motion deductible is normally lower, because the risk is lower.

What Agreed Value Means in an Aviation Policy

Agreed value is the cleaner of the two ideas.

You tell the underwriter what your aircraft is worth. The underwriter reviews it, agrees, and writes that number on the declarations page. If the aircraft is destroyed or written off, the insurer pays that number, minus your deductible. No haggling about depreciation. No adjuster pulling up market listings to argue you down.

Here is how it plays out in a simple example:

1. You insure a light single for $180,000 on an agreed value basis.
2. Eighteen months later, the aircraft is destroyed in a hangar fire.
3. The market has softened, and comparable aircraft now sell closer to $165,000.
4. The insurer still owes you $180,000, less your deductible.

That predictability is the whole point. Aircraft do not depreciate on a neat schedule the way cars do. A 1978 airframe with fresh paint, a mid-time engine, and a modern panel can be worth far more than an identical airframe left outside for a decade. Agreed value lets the policy reflect that.

Why It Matters: With agreed value, the argument about worth happens before the loss, while everyone is calm and has time to look at logbooks. With other valuation methods, that argument happens after the loss, when you have the least leverage and the most stress.

Most aircraft policies in general aviation are written this way. Brokers often call it "agreed amount." The industry leans on it because aircraft values are hard to pin down with a generic pricing guide, and because owners with financing need certainty.

Understanding how aircraft valuation and depreciation work makes this conversation much easier. When you can explain why your airplane is worth what you say it is worth, underwriters tend to agree faster.

What Stated Value Means and Why the Wording Matters

Stated value starts the same way. You state a value. It goes on the policy. So far, identical.

The difference lives in one sentence buried in the valuation clause. Many stated value policies across the insurance world say the insurer will pay the lesser of the stated amount or the actual cash value at the time of loss. That single phrase flips the risk back onto you.

Run the same hangar fire through a stated value policy with that wording:

1. You state $180,000.
2. The aircraft burns.
3. The adjuster determines market value on the day of loss was $165,000.
4. You are paid $165,000, minus your deductible.

You paid premium on $180,000. You collected on $165,000. The difference stayed with the insurer.

Heads Up: In aviation specifically, plenty of brokers and carriers use "stated value" and "agreed value" as interchangeable labels for the same agreed-amount coverage. The label alone tells you nothing. The valuation clause tells you everything. If your policy contains the words "lesser of," slow down and read it twice.

This is where most confusion comes from. An owner reads a car insurance article about stated value, panics, and calls the broker. Their aviation policy turns out to be agreed-amount coverage with a different name on it. Another owner assumes the same thing and turns out to be wrong.

The fix takes about five minutes. Pull your declarations page. Find the physical damage or hull section. Read the sentence that explains what gets paid on a total loss. If it names a single fixed amount, you have agreed value protection. If it offers the insurer a choice between two numbers, you do not.

Ask Your Broker These Four Questions

• Is my hull coverage written on an agreed amount basis?
• Does the valuation clause include any "lesser of" language?
• What percentage of insured value triggers a total loss on this policy?
• What proof would you need from me to raise my hull value at renewal?

Where Actual Cash Value Fits Into the Picture

Actual cash value is the third option, and it is the one most people already know without realizing it.

Actual cash value, usually shortened to ACV, means market value minus depreciation on the day of the loss. It is the standard for car policies. If you total a five-year-old sedan, the insurer looks up what that sedan was worth that morning and pays that.

ACV is uncommon for private aircraft hull coverage, and for good reason. Aircraft values move with engine time, avionics, damage history, paint and interior condition, and the wider market. Two identical model years can differ in price by a wide margin. A pure depreciation formula would miss all of that.

Here is a simple comparison:

Fun Fact: Aviation has leaned on agreed-amount coverage for a very long time, in part because aircraft have always been harder to price than cars. Underwriters would rather settle the number once, in writing, than fight about it after an accident.

Market conditions do move underneath you, which is part of why hull values need regular attention. Financing costs shift buyer demand, and interest rates move aircraft prices in ways that show up on your renewal quote a year later.

Agreed Value vs Stated Value Aircraft Insurance: 8 Differences That Decide Your Check

Both terms describe a number on a page. What they do not share is how that number behaves under pressure. These eight differences are where the money is.

1. How the Payout Number Gets Set

Agreed value is negotiated up front and locked in. You propose, the underwriter accepts, and both sides are bound to it.

Stated value with restrictive wording is declared up front but calculated later. Your declaration sets a ceiling. The adjuster sets the floor. You get the lower one.

2. What Happens to Depreciation

Under agreed value, depreciation between the policy start and the loss date does not reduce your payout. The number stands.

Under a "lesser of" stated value clause, depreciation is very much in play. Every month of engine time and every softening in the market can shave the final check.

3. Who Absorbs a Market Drop

Aircraft markets move. Fuel prices, financing costs, and model-specific demand all push values around.

With agreed value, a mid-policy market drop is the insurer's problem. With stated value that references ACV, it is yours. That distinction matters most for models known to lose value quickly, and knowing which aircraft depreciate fastest helps you judge your own exposure.

4. How Much Proof You Need Before Binding

Agreed value usually requires more homework. Underwriters may ask for a bill of sale, a recent appraisal, upgrade receipts, or comparable listings before signing off on a higher number.

Stated value often takes your word for it at binding, then verifies at claim time. That feels easier at the start and much harder at the end.

5. How Quickly the Claim Settles

An agreed value total loss is close to administrative. The adjuster confirms the loss qualifies, the insurer issues the check for the declared amount, and takes the salvage.

A valuation dispute adds weeks. Sometimes months. Comparable sales get pulled, appraisers get hired, and the two sides trade spreadsheets while your airplane sits in pieces.

Pro Tip: Keep a simple insurance folder with your latest appraisal, avionics invoices, engine overhaul records, and a few screenshots of comparable listings. If you ever need to defend a hull value, having it in one place turns a three-week conversation into a three-day one.

6. How Each One Affects Premium

Hull coverage generally makes up the larger share of an aircraft insurance premium, with liability making up a smaller portion. So your hull number drives most of your bill.

Some owners try to trim premium by shaving the hull value. The savings are usually modest. The exposure created is not. Dropping your insured value by ten percent to save a small slice of premium means eating that ten percent yourself if the aircraft is written off.

7. How Lenders and Lienholders Treat It

If your aircraft is financed, the bank has opinions about this.

Lenders normally require the hull value to at least equal the loan balance. Many also require a breach of warranty endorsement, sometimes called lienholder extended coverage. That endorsement protects the bank even if a policy condition was violated, such as an unapproved pilot flying the aircraft. These endorsements are often written to cover a percentage of the balance rather than the whole thing, so a hull value set right at the loan amount can still leave a gap.

Before closing on any financed aircraft, running title searches and lien checks keeps surprises off your insurance application too.

8. What Happens During a Partial Loss

Most claims never reach total loss territory. They are gear-up landings, hail damage, prop strikes, and hangar rash.

In a partial loss, the insurer pays for repairs up to the insured value, minus the deductible. Your hull number still matters, because it sets the threshold for when repairing stops making sense. A low hull value can turn a repairable airplane into a write-off you did not want.

Flying411 lists overhauled and serviceable engines along with certified parts and avionics, which is worth knowing when a repair estimate hinges on sourcing a component quickly.

How Insurers Decide Between Repairing and Totaling Your Aircraft

This is the part that surprises owners most, and it connects directly back to your hull number.

Insurers use a concept called constructive total loss. The idea is simple. If fixing the aircraft costs more than it is worth to fix, the insurer writes it off instead.

The math generally works like this:

1. The adjuster gets a repair bid from a shop.
2. The adjuster gets a salvage bid for the damaged aircraft.
3. If repair cost plus other loss costs push past a set percentage of insured value, the aircraft becomes a constructive total loss.

That trigger point is written into the policy. Many aviation policies place it somewhere in the range of roughly 75 to 90 percent of insured value, though the exact figure varies by carrier and aircraft.

Keep in Mind: Underinsuring pushes your aircraft toward being totaled. If repairs would cost $95,000 and you only insured for $110,000, the insurer may find it cheaper to pay you the $110,000 and sell the salvage. You lose an aircraft that was worth $140,000 and receive $110,000 for it.

Overinsuring creates the opposite problem. If your hull value is inflated well past market, the insurer has a strong incentive to repair rather than write off, even when you would rather take the money and start fresh. You end up with a repaired airframe carrying damage history, which affects resale.

Salvage itself has real value. Damaged airframes get stripped for components, and the economics behind how parting out works explain why insurers are often willing to total an aircraft. The same logic applies at the far end of the size scale, where a retired 747's parts value can exceed what the whole aircraft would fetch intact, and it explains a lot about where retired airliners end up.

The takeaway is straightforward. Accuracy protects you in both directions. Too low, and you lose equity. Too high, and you lose control of the outcome.

How to Set the Right Insured Hull Value

Your insured hull value should reflect what a reasonable buyer would pay for your aircraft today. Not what you paid for it. Not what you have spent on it. Not what you wish it were worth.

That last point trips up a lot of owners. Money spent does not equal value gained. A $40,000 panel upgrade rarely adds a full $40,000 to resale.

Start With Real Market Data

Asking prices are a starting point, not an answer. Listings show what sellers hope to get, not what buyers paid. Look at several sources and adjust for condition.

Useful reference points include:

• Recent sale prices for the same make, model, and year
• Engine time remaining before overhaul
• Avionics and autopilot configuration
• Damage history and logbook completeness
• Paint and interior condition
• Total airframe time

Comparing new and used aircraft markets gives useful perspective here, since new aircraft pricing tends to anchor the top of a used market segment.

Consider a Formal Appraisal

A professional appraisal gives you a defensible number. It matters most for higher-value aircraft, unusual types, heavily modified airframes, and anything with a complicated history.

If you are weighing it, look at what an appraisal costs against the size of your hull value. For a six-figure or seven-figure airplane, the cost is small insurance against a valuation fight. It also helps to know what appraisers look for so you can have your records in order before they arrive.

There is a real difference between appraisals compared to online estimates, and underwriters know it. If you are unsure how far to go, the question of needing a certified appraiser usually comes down to value, complexity, and how much financing is involved.

Quick Tip: Set a calendar reminder about six weeks before your policy renewal. Use that window to review your hull value, gather any new receipts, and give your broker time to shop the number properly. Renewals handled in the last three days are renewals handled badly.

Review It Every Single Year

The most common and most expensive mistake in aircraft insurance is setting a hull value at purchase and leaving it there for a decade.

Values change. You install a new panel. You overhaul an engine. The market for your model heats up or cools off. Any of those should trigger a fresh look at your number.

You can start with a straightforward aircraft value check and use that as the basis for a renewal conversation.

Common Mistakes That Cost Owners Money

A few patterns show up again and again in claim disputes.

Insuring only the loan balance. Banks care about their exposure, not your equity. If you owe $90,000 on a $150,000 airplane and insure for $90,000, a total loss wipes out $60,000 of your money.

Never updating after upgrades. New avionics, a fresh overhaul, and new paint can move a value meaningfully. If the policy never hears about it, the policy never pays for it.

Assuming both terms mean the same thing. They often do in aviation. They do not always. Reading the clause costs nothing.

Confusing coverage type with valuation basis. Ground-only coverage and all-risk coverage are different questions from agreed value and stated value. You can get one right and the other wrong.

Forgetting the deductible. Your check is the insured value minus the deductible. On policies where the in-motion deductible is a percentage of hull value, a higher hull number also means a higher deductible.

Skipping documentation. Logbooks, receipts, and inspection records are what support a value claim. Buyers care about them, and so do underwriters. That is one reason careful logbook and maintenance history verification pays off long after the purchase closes.

Who Needs to Pay the Closest Attention

Some owners can treat this as routine. Others should treat it as a priority.

• Financed owners. Lender requirements and breach of warranty wording add complexity that cash buyers never deal with.
• Owners of appreciating or specialty aircraft. Warbirds, restored classics, and low-production types can gain value. A stale hull number ages badly.
• Owners who recently upgraded. Any major avionics, engine, or interior work should trigger a value review.
• Owners of high-depreciation models. If your model is sliding in value, an inflated hull number costs you premium without adding protection.
• New owners. The first policy sets habits. Getting the basis and the number right at the start avoids years of drift.
• Partnership and co-ownership groups. More owners means more people who assume someone else checked the policy.
• Turbine operators. Higher values, higher repair costs, and percentage-based deductibles make precision more important.

The type of aircraft you fly shapes all of this too. Insurance treatment differs meaningfully across piston, turboprop, or jet categories, both in premium and in how claims get handled.

Ownership cost math also feeds back into this decision. When you calculate your operating cost per hour, insurance premium is a fixed line item that sits alongside hangar, annual inspection, and reserves. Trimming it by underinsuring is a false economy, since the savings are small and the downside is not.

What This Means When You Buy or Sell

Valuation habits matter at both ends of ownership.

When buying, the hull value you set for your first policy should track the real purchase price and condition, backed by a solid pre-purchase inspection. A good inspection tells you what the airplane is worth, which is exactly the number your underwriter wants.

Buyers weighing options often find that the value case for buying a used plane is strong, but used aircraft come with history that affects both price and insurability.

When selling, the same documentation that supports a hull value supports an asking price. Owners who stay on top of records tend to have an easier time preparing a plane for sale and setting a realistic pricing strategy that holds up under buyer scrutiny.

Transactions bring their own paperwork. Getting FAA registration records in order and understanding the tax side of a sale keeps closing clean. Many owners lean on brokers and acquisition consultants for this, and the skill set involved is close enough to insurance valuation work that some people end up becoming aircraft brokers themselves.

Ready to see what your aircraft is really worth in today's market? Browse current listings and comparable sales on Flying411 before your next renewal conversation.

Conclusion

The debate over agreed value vs stated value aircraft insurance comes down to one question. When the worst happens, does your policy pay a number you already know, or a number someone else calculates later?

Agreed value gives you the first answer. Stated value might give you the second, depending on how the clause is written. In aviation, the two labels are often used to describe the same agreed-amount coverage, which is exactly why you cannot rely on the label alone.

So do the boring thing. Pull the declarations page. Read the valuation clause. Compare your hull number to what your aircraft would sell for this month. Then set a reminder to do it again next year.

Your airplane is one of the largest assets you own. It deserves fifteen minutes of attention once a year.

When your hull number needs a reality check, Flying411 puts real aircraft, engines, and parts pricing in front of you, so the value on your policy matches the value on the ramp.

FAQs

Can I raise my hull value in the middle of a policy term?

Yes, most carriers allow mid-term adjustments, usually with an additional premium charge for the remaining term. It is a common step after a major avionics or engine upgrade.

Does agreed value coverage cost more than stated value coverage?

Premium is driven mainly by the hull number itself, along with pilot experience and aircraft type, rather than by the valuation label. Two policies with the same hull value are often priced similarly.

What happens to my aircraft after a total loss payout?

The insurer typically takes ownership of the salvage once it pays the claim. Some owners negotiate to buy the salvage back, though that depends entirely on the carrier and the situation.

Does hull insurance cover the aircraft while it is being repaired at a shop?

Coverage during maintenance varies by policy, and some repair facilities carry their own hangarkeepers coverage. Confirm with your broker before dropping the aircraft off for extended work.

Will my insurer require an appraisal to approve my hull value?

Not always for common production aircraft with clear market data, but underwriters frequently request one for high-value, rare, heavily modified, or experimental aircraft.