Stated Amount Endorsement
What Does Stated Amount Endorsement Mean?
A stated amount endorsement is an endorsement to a policy by the insurance company that waives the coinsurance clause on the specified property. Also known as an agreed amount endorsement, it ensures that no coinsurance penalty will be applied as long as the endorsement remains in effect. This type of endorsement is typically provided when it is difficult to determine the value of the insured vehicle. Stated amount endorsements are most often added to policies covering older commercial trucks or specialty vehicles, where a standard ACV payout would be hard to settle. It is a common option on commercial trucking insurance policies.
Insuranceopedia Explains Stated Amount Endorsement
The stated amount endorsement modifies the Limit of Insurance provisions in a commercial auto policy. Without this endorsement, physical damage coverage is not limited. In the event of damage to a covered auto by a covered peril, the insurer will pay for the cost to repair or replace the damaged property, or the vehicle’s actual cash value.
The stated amount endorsement or stated amount coverage offers a significant benefit to the insurer. In the event of a total loss, the insurer is not obligated to pay the full limit of insurance (the estimated value of the vehicle). Instead, the insurer can pay its own estimation of the vehicle’s actual cash value. Business owners shopping for commercial auto insurance should ask whether a stated amount endorsement is available for any vehicle that is hard to value on the open market.
