Legal Definitions - agreed value

Agreed value refers to the value of a property that is fixed by agreement between the parties involved. This can be seen in an insurance policy where a list of property values is agreed upon. It is different from fair market value, which is the price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm's-length transaction.

For example, if a homeowner and an insurance company agree that the value of the homeowner's property is $500,000, then that is the agreed value. This value will be used in the event of a claim, regardless of whether the fair market value has increased or decreased.