What is the agreed value provision typically used for?

The agreed value provision is typically utilized for fine arts, antiques, and similar property because these types of assets often have unique characteristics that can make their market value difficult to determine. Unlike more standardized items such as vehicles or manufactured goods, fine art and antiques are often appraised based on their distinct qualities, historical significance, and collector demand.

An agreed value provision allows the insured and the insurer to determine a value for these items in advance, which is crucial when dealing with assets where values can fluctuate significantly. This provision ensures that, in the event of a loss, the insured will receive the predetermined amount without the need for extensive post-loss valuation negotiations.

While other types of property can have insurance valuations, the nature of fine arts and antiques makes the agreed value provision particularly appropriate for them, as it simplifies the claims process and provides peace of mind to the policyholder regarding the worth of their valuable items.