Glossary

Agreed Value Endorsement

Also known as: Agreed Amount Endorsement

A property policy endorsement in which the insurer and insured agree in advance on the property's insurable value, waiving the coinsurance penalty for the policy term regardless of subsequent changes in actual replacement cost.

By stipulating the insurable value up front — typically supported by a statement of values, a construction-cost estimate, or an appraisal's cost approach — the endorsement removes the risk that a carrier disputes the adequacy of coverage after a loss and applies a coinsurance penalty. It has become close to standard on institutional CRE loans precisely because lenders want certainty that a partial loss will be paid in full up to policy limits without a value dispute delaying restoration funds. The endorsement is not a substitute for keeping the insured value current, however: it fixes the value used for the coinsurance test, not the actual dollar limit of coverage, so a property still needs its overall insured limit reviewed periodically to keep pace with construction-cost inflation and any capital improvements.