There seems to be a bit of confusion among non-insurancefolk about the difference between “agreed value” policies and “stated amount” policies.  Don’t worry, it’s probably done by design when the insurance underwriters (rarely) get together with the insurance marketers.  Anyway, let’s clear things up.

When a piece of property is covered, whether it’s a boat or classic car, etc., insurance companies charge a rate that corresponds to the value of the piece of property.  In most cases, values are well-known and can be verified by independent 3rd party sources like the National Automobile Dealer’s Association (NADA) or Kelley Blue Book.  However, when you veer off the beaten path into special interest items, market values are not so clear-cut, and insurance pricing becomes more difficult.  Enter Agreed Value and Stated Amount.

Here’s the main difference between Agreed Value and Stated Amount.  Stated Amount policies are priced based upon what you say the item you’re insuring is worth.  If you have a loss, the stated amount is the ceiling (maximum) the insurer will pay for that item.  At the time of the loss, if market data determines that your item was worth less than you say it was, you will be paid less unless you can convice your insurance company otherwise.  Agreed Value, on the other hand, is an amount that you and your agent/insurer agree your item is worth ahead of time.  The rate you pay is based on this amount, and if you have a total loss of said item, that is the amount you’ll get for it.

Generally speaking, Agreed Value policies are more carefully underwritten to prevent the obvious fraud potential.  But, from a consumer’s point of view, I’d have to say they are a superior policy.  If you’d like a quote on an Agreed Value policy for one of your special belongings, give one of our agents a call at 1-888-348-3337.