They seem to have a Bloke who knows about these things, who looks at the photo's and the declaration forms and decides if would cost your valuation to replace like for like. If you give an honest valuation and submit it to them before your policy is due to start they either agree with your figure or say what they think is reasonable. If you don't agree they might ask for an independent valuation.
There seem to be more companies doing agreed valuations now so it might be worth shopping around.
I got agreed valuation of £7.5K for 2005 X350 Sovereign, 50000 miles limited to 6k miles a year, and £14k for 2001 XK. 39000 miles limited to 2k miles. I think the X350 would cost more to replace and will shop around next year.