31 May, 2022

ARGIS Farm Extra Insurance explained: understanding the ARGIS approach to market value for farm vehicles

They say a claim is the moment of truth in an insurance policy, so it can be confusing for clients when they receive an amount of money that is less than what they were expecting in the event of a total loss.

This can occur if claims are settled on a market value basis rather than an agreed value basis, or in the event that a policy provides for both options.

ARGIS farm underwriting manager Peter Morsley says it’s a situation that is often misunderstood by policyholders and, in some cases, by brokers.

What does the policy say?

Farm vehicles are defined as motorcycles, machinery, implements, tractor attachments, trailer, truck, utility or any other vehicle used in farming operations that is not classified as a car in ARGIS’s policies, Mr Morsley says.

In the event of a claim that is classified as a total loss, the policy says the policyholder will receive either market value or the sum insured agreed value, whichever is lower.

How market value is calculated

ARGIS outsources its claims handling to InsureTech claims company Innovation Group. Customer manager at Innovation Group, Kylie Harmer, explains that once it receives an ARGIS claim from a broker, Innovation Group processes the lodgment, collects images of the damages and arranges for quotes on the repair.

“Our assessors will then assess the damage to the vehicle and determine whether it is economical to repair, a decision which is typically based on the percentage of the vehicle that has sustained damage as well as the extent of the damage sustained,” she says.

Factors used in calculating market value

If a vehicle is determined to be a total loss, Innovation Group’s assessors will assign a market value to the vehicle, based on their investigations of a number of sources.

This assessment is then shared with the broker, along with a rundown of the settlement amount the policyholder will receive, Ms Harmer explains.

When calculating market value, Innovation Group’s assessors consider several factors including:

  • The type of vehicle (make, model and specification).
  • The age of the vehicle.
  • The damage caused to the vehicle.
  • The hours of usage.


“Just as a car is no longer considered brand new and depreciates in value as soon as its driven out of the car yard, the same applies to farm vehicles,” she explains.

Ms Harmer says usage can also impact value, because a relatively new may still have been heavily used.

“During harvesting season some of these types of vehicles are running day and night, which means their value can fall quickly even if they are quite new.”

What to do if you disagree with a market value determination

If you receive a market value assessment that you, or your client, disagrees with, a review of the calculation can be requested.

“To have an assessment reviewed we ask that the broker submits a like-for-like comparison, as well as two or three examples showing values for similar vehicles. Our assessors will then conduct a further review taking that evidence into account,” Ms Harmer says.

Here to help

For more information about how market value is assessed on farm vehicles, the terms of the ARGIS Farm Extra Insurance policy, or for general enquiries about farm insurance, you can visit our ARGIS Farm Extra Insurance product page or contact us on 1300 794 364.

This document is intended for insurance intermediaries only. This product is issued by SGUAS Pty Ltd t/as ARGIS Insurance (ABN 15 096 726 895, AFSL 234437) ('ARGIS') acting under a binder agreement with HDI Global Specialty SE - Australia (ABN 58 129 395 544, AFSL 458776) ('HDI Global Specialty') the insurer of this product. Any advice contained in this document is general advice only and does not take into account your client’s objectives, financial situation or needs. Before making a decision to purchase the product we recommend your client consider whether it is appropriate for their circumstances and read the Product Disclosure Statement ('PDS') and the Target Market Determination ('TMD') which can be obtained by contacting ARGIS or visiting www.argis.com.au