Valued Policy Law

What Does Valued Policy Law Mean?

The valued policy law is a law that requires insurance companies to reimburse policyholders for the full value of their loss under a valued policy, rather than its actual cash value. Unlike actual cash value, the full value does not account for depreciation.

Insuranceopedia Explains Valued Policy Law

The valued policy law has been adopted in many states, although some states have yet to implement it. The primary reason people purchase valued policies is to ensure they receive full reimbursement in the event of a loss. The purpose of the law is to protect valued policyholders, ensuring they are not disadvantaged or cheated in the case of a total loss that is covered by the policy.