Under the agreed value method, if there is a total loss, what happens?

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Multiple Choice

Under the agreed value method, if there is a total loss, what happens?

Explanation:
Under the agreed value method, the value of the property is fixed in the policy by agreement between the insurer and the insured. If there is a total loss, the insurer pays the pre‑agreed amount stated in the policy (up to the policy limit), regardless of changes in market value or depreciation. This provides certainty for items whose value can be hard to pin down or fluctuate, like jewelry or art.

Under the agreed value method, the value of the property is fixed in the policy by agreement between the insurer and the insured. If there is a total loss, the insurer pays the pre‑agreed amount stated in the policy (up to the policy limit), regardless of changes in market value or depreciation. This provides certainty for items whose value can be hard to pin down or fluctuate, like jewelry or art.

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