Agreed Amount Form

What Does Agreed Amount Form Mean?

The agreed amount form is a property insurance policy that specifies the exact amount the policyholder will receive in the event of damage or loss to the insured property. This amount is renegotiated during the policy renewal period to reassess what is acceptable to both parties.

Insuranceopedia Explains Agreed Amount Form

The agreed amount represents the joint valuation of the policyholder and the insurance company (or its representative). This is the amount the company will pay in the event of a loss or total damage. The agreed amount is based on the market value of the property.

If the property is damaged, the insurance company will cover the lesser of the agreed amount specified in the contract or the cost of repairing the damage.

If this provision is not included in the insurance policy, the policyholder can request an endorsement to add this feature.

An endorsement may also be requested if the market value of the insured property changes. In such cases, the endorsement will adjust the agreed amount accordingly.