Financial

Agreed Amount Clause

Agreed Amount Clause

A clause in a property insurance contract stating that if an insured event occurs, the insurance company will pay either the amount to repair or replace the property or a set maximum, which is called the agreed amount. In general, a policyholder pays a higher premium for a higher agreed amount.
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References in periodicals archive
They are still insisting, as they must, that each insured carry his weight by insuring to value; but for the wise buyer who will take the time to determine the correct value of his property (whether on a replacement cost or actual cash value basis) and purchase the appropriate amount of insurance, carriers will eliminate the co-insurance clause and add instead an "agreed amount clause".
There is no additional charge for the agreed amount clause - you simply have to purchase and pay for the proper amount of coverage.
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