What is Agreed Value in Commercial Property Insurance?

Agreed value is a term used in commercial property insurance that refers to the pre-determined value of the insured property, which is agreed upon by the insurance company and the policyholder at the time the policy is issued.

With agreed value coverage, the insurance company agrees to pay the agreed-upon value of the property in the event of a covered loss, regardless of its current market value or depreciation.

This type of coverage is typically used for unique or hard-to-replace properties, such as historic buildings, artwork, or specialty equipment, where it may be difficult to determine the property's value at the time of loss.

Agreed value coverage may be more expensive than other types of commercial property insurance, but it provides greater certainty and peace of mind for the policyholder in the event of a covered loss.

Video by Dax Kastrin, Elemental Risk Management, Commercial Insurance Agency Principal.
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