What Does Valued Policy Law Mean?
The valued policy law is a law which compels insurance companies to reimburse valued policy holders for the full value of their loss instead of its actual cash value. Unlike the actual cash value, full value does not take into account depreciation.
Insuranceopedia Explains Valued Policy Law
The valued policy law has been accepted and put into place in many states. However, some states have yet to adopt it. The main reason people purchase valued policies is to receive full reimbursement in the case of a loss. The purpose of the law is to protect these valued policyholders and to make sure that they do not get cheated in the event of a total loss that is covered by the policy.