Agreed Value is an agreement made between the Insurance Company and the Policy Holder at policy inception that the limit of insurance listed in the schedule of property is the item's value, and this is the amount that will be paid by the company in the event of a total loss.
The election of this option suspends the application of the coinsurance provisions of the policy.
This is made by inserting an agreed value amount and expiration date for that agreed value amount under the Agreed Value heading in the Declarations page.
An Agreed Value must be specified for each location and type of covered property to which the election applies. The Insurance Company may require a recent appraisal of the property or properties or an explanation of how the values were determined. At a minimum, it will normally require a signed statement as to the property values. If the Policy Holder fails to submit the updated statement of values, coinsurance will be reinstated. If a loss occurs during a period of time when the agreed value coverage is in place, the Insurance Company will pay no more for the loss or damage to the property than the proportion that the Limit of Insurance for the damaged or lost property bears to the Agreed Value shown for it in the Declarations page.
Agreed value coverage does not provide complete protection against underinsurance, since the most the Company will pay, regardless of the agreed value stated, is the Limit of Insurance applicable to the covered property.
Personal Auto, Homeowners and other related topics for individual or family insurance needs.
