Agreed Value
An insurance settlement basis where the insurer and policyholder agree upfront on the value of the insured item, with no depreciation deducted at claim time.
Agreed value (also called stated value in some contexts) is a coverage basis where the insurer and policyholder contractually agree on the value of the insured property at the time the policy is written. In the event of a total loss, the insurer pays the agreed amount in full—there is no depreciation calculation, no ACV dispute, no market value determination at the time of loss.
Agreed value is most common for collectibles, antiques, jewelry, fine art, classic cars, boats, and musical instruments—items whose value does not follow standard depreciation schedules and may be difficult to value quickly after a loss. Getting an agreed value policy typically requires an appraisal from a qualified professional.
For real property, some high-value homeowners insurers offer "guaranteed replacement cost" or "extended replacement cost" endorsements that function similarly—if the home is a total loss, the insurer pays the full rebuilding cost regardless of the stated limit, within defined parameters. This differs from standard replacement cost coverage, which is capped at the policy limit.
Real-World Example
After obtaining a professional appraisal for $45,000, the collector insured his vintage Gibson guitar under an agreed value policy; when it was stolen, he received the full $45,000 immediately.