Valued Policy — Insurance Claims Definition
A policy that agrees in advance on the value of insured property, so that amount is payable in full in the event of a total loss.
A valued policy specifies a fixed amount payable for certain property (often fine art, antiques, or unique items) in the event of a total loss, without requiring proof of market value at the time of loss. It differs from standard policies that pay the lesser of actual loss or the limit.
Some states regulate valued policy laws separately for total fire losses on real property — those statutes vary widely and can affect whether full policy limits apply when the building is a total loss.
Examples
A scheduled jewelry item is insured for $50,000 on a valued basis; after a theft, the insurer pays $50,000 without a post-loss appraisal dispute.
Common Mistakes
Confusing a valued policy with agreed value endorsements on homeowners policies causes misunderstanding of what must be proven at claim time. Always read state-specific total loss statutes for real property.
