You are buying or renewing coverage on your plane, and the quote form asks for one number: the hull value. It looks like a simple field. For many owners, it is the most important number on the policy.
We hear the same question from pilots all the time. Set it high and the premium goes up. Set it low to save money and you may be taking on a risk you did not plan for. Here is how we think about it.
What the hull value actually does
On an agreed value policy, you and the insurer settle on a fixed amount when the policy is written. That number is the starting point for a total loss payout, and it also drives much of your hull premium. Our guide to how hull coverage works covers the basics. Stated value is different, because the insurer may factor in depreciation when settling.
The trouble with setting it too low
Pilots on forums often suggest lowering the number to trim the premium. It can look smart on paper, but think about what it signals. If the declared value sits well below what the aircraft is really worth, a damaged plane could be cheaper for an insurer to write off than to repair. How that plays out depends on your policy wording and the damage, so ask your insurer how it handles it.
Here is a simple test. Would you sell your undamaged aircraft for the number on your policy? If the answer is no, the number may be too low.
Do not forget the extras
Avionics, a recent engine overhaul, fresh paint and other upgrades all add to what your aircraft is worth. Your hull value should reflect the plane as it is today, not as it was the day you bought it. If you are planning a panel project, read what owners should tell their insurer before an avionics upgrade.
How to land on a sensible number
Start with recent sales of similar aircraft, then adjust for engine time, avionics and condition. A broker or your insurer can review the figure with you. Revisit it at every renewal, because the market moves. For a wider look at what drives price, see what it costs to insure your light aircraft.
Setting the value is one piece of building a policy that fits how you fly. If you are comparing options, start with our aircraft owner insurance page.
Frequently Asked Questions
What is agreed value on an aircraft policy?
It is a fixed amount you and the insurer settle on when the policy is written. It is the reference for a total loss payout, subject to the policy terms.
Does a lower hull value always mean a lower premium?
Hull premium is usually tied to the insured value, so a lower number often costs less. The trade-off is that you may be underinsured.
How often should I review my hull value?
At every renewal, and any time you add avionics, overhaul an engine or make other major upgrades.
Is stated value the same as agreed value?
No. With stated value, the insurer may factor in depreciation when settling, so the payout can differ from the number listed.
Who can help me pick the number?
A broker or your insurer can review recent sales of similar aircraft with you. Ask them to explain how your policy treats the value.
