What Does Agreed Amount Form Mean?
Agreed amount form is a property insurance policy that specifies the exact amount the policyholder will receive in case of damage or loss of the property insured. It is renegotiated during the renewal period of the policy to reassess what amount is agreeable to the parties.
Insuranceopedia Explains Agreed Amount Form
The agreed amount is the joint valuation of the policyholder and the insurance company (or the representative of the company). This is what the company will pay after a loss or total damage. The agreed amount is based on the market value of the property.
If there is damage to the property, the insurance company can cover the lesser value between the agreed amount on the contract or the cost of repair for the damage.
In absence of this provision in the insurance form, and if the person wants to avail of this, they can ask for an endorsement that will add this feature to the policy.
An endorsement might also be requested if the insured property has changed its market. The endorsement will change the value of the agreed amount.