“Stated value” vs “Agreed Value” – aren’t they the same?

No, they are not.

Which one is better? Let’s take a look…

Here is the traditional definition of “Stated Value”:

“In the event of a total loss we will pay the Stated Value or the Actual Cash Value, whichever is less.” Note the word “less”. This essentially allows the carrier to adjust the loss on an ACV basis.

To get the protection desired, the better approach is to secure coverage on an Agreed Value basis. How does that work? It is often referred to as “short and sweet”. The carrier and the insured reach an agreement on the value of the item (car, boat, etc.). In the event that the insured item is damaged or destroyed, the insurance company pays out the agreed upon value – no more, no less.

To secure this level of valuation, it may be necessary for you (as the agent) to look at specialty carriers. This is often one of the areas where the coverage form is better.

“Stated Value” is definitely not the same as “Agreed Value”. This is probably one of the big misunderstandings in the insurance world.

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