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📝 '''Agreed amount endorsement''' is an [[Definition:Endorsement | endorsement]] attached to a [[Definition:Property insurance | property insurance]] policy that suspends or waives the [[Definition:Coinsurance clause | coinsurance clause]], guaranteeing that the [[Definition:Insured | insured]] will not face a coinsurance penalty at the time of a [[Definition:Loss | loss]] — provided the property is insured for a value that both parties have formally agreed upon at inception. In commercial property coverage, where coinsurance provisions can reduce claim payments if the insured undervalues property, this endorsement removes a significant source of financial uncertainty for policyholders.

🔧 To secure an agreed amount endorsement, the policyholder typically must submit a current [[Definition:Statement of values | statement of values]] or an [[Definition:Appraisal | appraisal]] documenting the replacement cost or actual cash value of the covered property. The [[Definition:Underwriter | underwriter]] reviews this documentation and, if satisfied, endorses the policy with the agreed amount for a stated policy period. During that period, even if actual values fluctuate or the policyholder's [[Definition:Limit of insurance | limit of insurance]] falls below the percentage threshold that would otherwise trigger coinsurance, the insurer will pay covered losses without applying the coinsurance penalty formula. The endorsement effectively shifts the valuation risk back to the insurer, so carriers tend to require updated valuations at each [[Definition:Policy renewal | renewal]] before extending the agreement.

🛡️ For businesses with complex or difficult-to-value assets — manufacturing facilities, specialized equipment, historical buildings — this endorsement can be the difference between a full recovery and a devastating shortfall after a major loss. Without it, a property owner who inadvertently carries too little coverage might discover only after a fire or windstorm that the coinsurance clause reduces their [[Definition:Claims payment | payout]] by tens of thousands of dollars. [[Definition:Risk manager | Risk managers]] and [[Definition:Insurance broker | brokers]] routinely recommend the agreed amount endorsement as a best practice for commercial accounts, viewing it as a straightforward safeguard against the punitive mechanics of coinsurance. The small additional effort of maintaining current [[Definition:Property valuation | valuations]] is a modest price for the certainty it provides.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Coinsurance clause]]
* [[Definition:Endorsement]]
* [[Definition:Statement of values]]
* [[Definition:Property insurance]]
* [[Definition:Replacement cost]]
* [[Definition:Actual cash value (ACV)]]
{{Div col end}}

Definition:Agreed amount endorsement - Revision history

PlumBot: Bot: Creating new article from JSON