Definition of Valuation clause:
The valuation clause is a provision in some insurance policies which specify the amount of money the policyholder will receive from the insurance provider if a covered hazard event occurs. This clause stipulates a fixed amount to be paid in the event of a loss for an insured property. Several types of valuation clauses can be written, including replacement cost, actual cash value, stated amount and agr.
Insurance policy provision that the insurer and insured have reached an agreement regarding the value of goods or property covered under the policy.
Any policy which contains a valuation clause should be carefully reviewed to understand the circumstances when a benefit payment is necessary. Also, a policyholder should do a regular review of the listed dollar value for the property. Values which do not keep up with the reasonable cost of living, inflation, or changes to the local Building Code cost increases may not adequately protect the policyholder. Valuation clauses have a basis on an array of different factors about the specific property and individual budget requirements.
Meaning of Valuation clause & Valuation clause Definition