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🏷️ '''Stated value''' is a [[Definition:Valuation method | valuation method]] in insurance where a specific dollar amount is declared on the policy to represent the worth of the covered property, serving primarily as a reference point for [[Definition:Premium | premium]] calculation and as an upper limit on the insurer's [[Definition:Indemnity | indemnity]] obligation. In practice, stated value operates almost identically to [[Definition:Stated amount | stated amount]] — the terms are often used interchangeably in the market, particularly in [[Definition:Auto insurance | auto insurance]] for specialty and collector vehicles. The critical point is that a stated value policy does not guarantee payment of the full declared figure; the [[Definition:Insurance carrier | carrier]] retains the right to settle a [[Definition:Claim | claim]] at the lesser of the stated value or the property's [[Definition:Actual cash value | actual cash value]] at the time of loss.

⚙️ At [[Definition:Underwriting | underwriting]], the declared value influences the premium the policyholder pays — higher stated values produce higher premiums because the insurer's maximum potential exposure increases. However, if the insured property's market value declines between policy inception and a loss event, the policyholder may recover less than the stated figure. [[Definition:Adjuster | Adjusters]] evaluating a total loss under a stated value policy will typically research comparable sales, condition reports, and [[Definition:Appraisal | appraisal]] data to determine the actual cash value, then pay the lower of that figure or the policy's stated value. This mechanism protects insurers from overpaying on depreciated or overvalued assets while still giving the policyholder a defined ceiling of coverage.

💡 For [[Definition:Insurance broker | brokers]] and [[Definition:Insurance agent | agents]], clearly communicating how stated value differs from [[Definition:Agreed value | agreed value]] coverage is one of the most important advisory responsibilities in specialty personal lines. Under an agreed value policy, the insurer commits to paying the full declared amount in the event of a total loss, removing the tension between declared and actual cash values. Clients who own appreciating assets — vintage automobiles, rare equipment, or collectible property — are generally better served by agreed value endorsements, even if they carry modestly higher premiums. Failing to explain this distinction can expose the intermediary to [[Definition:Errors and omissions insurance | E&O claims]] and erode client trust when a loss settlement falls short of expectations.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Stated amount]]
* [[Definition:Agreed value]]
* [[Definition:Actual cash value]]
* [[Definition:Replacement cost]]
* [[Definition:Underwriting]]
* [[Definition:Appraisal]]
{{Div col end}}

Definition:Stated value - Revision history

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