What does a Valued Policy (Guaranteed Value) assign to each insured item?

A Valued Policy, often referred to as Guaranteed Value, assigns a set value to each insured item, which is predetermined and agreed upon by the insurer and the insured at the time the policy is issued. This means that in the event of a loss, the insured will receive the agreed-upon amount without any deductions for depreciation or market fluctuations. This approach provides certainty and peace of mind to the policyholder, as they know exactly how much they will receive if a loss occurs, regardless of the current market conditions or the item's age. This fixed valuation is particularly beneficial for unique items or collectibles where market value can vary significantly.