Tag Archive for coinsurance

What is agreed amount?

What is agreed amount?

Agreed amount is an insurance term on a property policy that waives the coinsurance clause. Coinsurance is a penalty feature put on a policy to prevent people from underinsuring.

Once the insurer has determined that you have met their guidelines for proper insurance to value, they will eliminate the coinsurance clause and replace it with the agreed amount clause. thus eliminating the chance of a penalty.

You are still required to insure to the proper limits, but this essential clause will come in handy, if you or the insurer has made a misjudgement in the amount you insured the property for.

There is little or no cost for this useful endorsements.