Agreed Value — Insurance Claims Definition
A policy provision fixing the value of insured property in advance, eliminating disputes over ACV at loss time for that property.
Agreed value establishes a contractually fixed limit for scheduled items or buildings so that, in the event of a total loss to that item, the insurer pays the agreed amount without re-litigating value. It is common for fine art, classic cars, and certain commercial schedules.
It differs from stated amount (which may still be subject to actual value limits in some contexts). Endorsements should be renewed with updated appraisals where values change.
Examples
A commercial policy schedules a piece of machinery at an agreed value of $200,000 based on a signed appraisal; total destruction results in payment of $200,000 minus any deductible.
Common Mistakes
Failing to update agreed values after major upgrades leaves property underinsured. Confusing agreed value with market value for real property can mislead expectations.
