What Does Valued Policy Mean?
A valued policy is a type of property insurance policy in which a set value is established to cover total losses. With such policies, the exact worth of the insured items or property at the time of loss is irrelevant, because the value of the covered property has already been established.
Insuranceopedia Explains Valued Policy
The value of certain pieces of property can change significantly over time. For example, pieces of artwork, jewelry, precious metals, and so on, may all increase or decrease in worth dramatically, depending on market conditions. The draw of a valued policy lies in the fact policyholders do not have to prove the extent of loss and will receive a specific benefit following a covered loss, no matter what their property's current value is. However, this also means the policyholder risks losing out money on items that have appreciated in value. Nevertheless, it is an alternative to insurance contracts, such as actual cash value policies, that only cover the current value of the items in question.