Agreed Value vs Stated Value

How Agreed Value and Stated Value work

Agreed Value and Stated Value are two ways insurers may handle the value of a commercial vehicle, trailer, equipment, or other insured property. They are most common on specialty, inland marine, garage, classic vehicle, and certain commercial auto policies, where the value of the item may not be as straightforward as a standard replacement-cost claim.

Agreed Value means the insurer and the policyholder agree in advance on the value of the covered item. If a covered total loss occurs, the claim is generally settled up to that agreed amount, subject to the policy terms, deductibles, and any applicable exclusions.

Stated Value means the insured states the amount they want to insure, but the insurer may still determine the actual claim payment based on the policy language and the item's actual value. In many policies, the insurer can pay the lesser of the stated amount or the actual cash value, so it is important not to assume the stated number is automatically guaranteed.

Key differences that matter in real life

• Certainty at claim time: Agreed Value is usually more predictable if the item is a total loss, while Stated Value can leave more room for adjustment based on policy wording.
• Documentation: Agreed Value often requires underwriting review, appraisals, photos, or records to support the agreed amount. Stated Value may be easier to place, but that does not mean it pays the stated figure automatically.
• Premium impact: Agreed Value can sometimes cost more because the insurer is accepting a fixed valuation. Stated Value may be lower-cost in some cases, but the tradeoff may be less certainty at claim time.
• Best use cases: Agreed Value is often used when the asset has a stable, known value. Stated Value is more common when the insured wants to request a value, but the item may still be valued differently after a loss.

Who should choose which option

Agreed Value may be a better fit if your business insures specialty equipment, a custom vehicle, a restored truck, or other assets where you and the insurer can document a specific value ahead of time. It is also useful when you want clearer expectations about a potential total-loss settlement.

Stated Value may be worth discussing if you want flexibility, especially when the asset value changes over time or when you are insuring equipment with a broad range of market values. Even then, review the wording carefully so you understand how a claim would be calculated.

• Ask whether the policy pays agreed amount, actual cash value, or the lesser of the two.
• Confirm whether any depreciation, coinsurance, or schedule requirements apply.
• Keep records such as purchase documents, appraisals, maintenance logs, and photos.

Georgia-specific notes and common mistakes to avoid

Georgia law does not require a special agreed-value or stated-value form for most commercial policies, but Georgia businesses should still read the policy language carefully because claim handling depends on the contract terms, not just the label. This matters for commercial auto, trailers, contractor equipment, and other property used in Georgia operations.

Common mistakes include assuming Stated Value guarantees the listed amount, failing to update values after upgrades or depreciation, and not matching the valuation method to the asset type. Another frequent issue is using outdated appraisals or forgetting to document modifications, which can create a coverage gap if a loss happens.

If you are comparing options for a Georgia business, a licensed agent can help explain how each form works for your specific policy and whether another valuation method may fit better.