What is agreed value coverage?

Agreed value coverage is an insurance policy feature where the insurer and the policyholder agree on a specific value for an insured item at the time the policy is issued. In the event of a total loss, the insurer pays the agreed-upon value, regardless of the item's current market value. This type of coverage is commonly used for high-value items like collectibles, antiques, or classic cars, ensuring that the owner receives a fair compensation without depreciation deductions. It provides greater peace of mind for the policyholder, knowing they will receive the full agreed amount in case of a loss.