Definition
A property insurance arrangement in which the insurer and policyholder agree on an asset's value upfront, eliminating any depreciation dispute at the time of a claim.
Under a standard replacement-cost or actual-cash-value policy, the insurer retains the right to appraise an item after a loss occurs — and that appraisal can result in a payout well below what the owner expected. Agreed value coverage removes that uncertainty: both parties settle on a stated dollar amount before the policy is written, and a total loss pays exactly that amount.
For families holding high-value real estate, aircraft, fine art, or scheduled valuables, this distinction is significant. Imagine a hypothetical family whose historic coastal home is destroyed in a hurricane. Under a standard policy, the insurer might argue the home's market value was lower than rebuilding cost. Under an agreed value policy, the pre-negotiated figure governs, reducing post-loss negotiation.
A frequent misconception is that agreed value and scheduled coverage are the same thing. Scheduling an item lists it specifically on the policy; agreed value describes how it will be paid out. The two often appear together but are separate concepts. Families with significant physical assets should ask their insurance advisor explicitly whether each covered item carries agreed value terms, and how often those agreed values are reviewed to keep pace with appreciation or inflation.
Last reviewed August 25, 2026 · Editorial Policy
