Valued Policy Law - VPL

A statute that requires insurance companies to pay the full value of the insurance to an insured entity in the event of a total loss. The Valued Policy Law does not consider the actual value of the insured property at the time of the loss; instead, the total loss mandates the total payment.

Not all states within the United States have these laws. States that do have Valued Policy Laws include Arkansas, California, Florida, Georgia, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Texas, West Virginia and Wisconsin. Wisconsin was the first state to pass a Valued Policy Law in 1874.

For example, if a property is insured for $200,000 and is destroyed by a fire, the insurance company would be required to pay the policy's stated value for the property ($200,000) without deduction or offset.

Hurricane Katrina forced the insurance industry in Louisiana to examine the Valued Policy Law; few policyholders were paid their entire coverage amount because of interpretations of the Valued Policy Law. Some insurers claim that the law does not apply because certain losses were a result of a non-covered peril (flood); that certain losses were a result of "mixed causation" - a combination of a covered peril (wind) and a non-covered peril (flood); and that the total loss was offset by other sources including the National Federal Flood Insurance Program and FEMA grants.


Investment dictionary. . 2012.

Look at other dictionaries:

  • valued policy law — n: a law requiring insurance companies to pay to the insured in case of total loss the full amount of insurance regardless of the actual value of the property at the time of the loss Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • Valued-policy law — (Fire Insurance) A law requiring insurance companies to pay to the insured, in case of total loss, the full amount of the insurance, regardless of the actual value of the property at the time of the loss. [Webster 1913 Suppl.] …   The Collaborative International Dictionary of English

  • valued policy law — noun : a law requiring insurance companies to pay to the insured in case of total loss the full amount of the insurance regardless of the actual value of the property at the time of the loss …   Useful english dictionary

  • valued policy — n: an insurance policy in which the insurer and insured agree on a stated amount that will be paid in the event of a future loss instead of an amount that would have to be proven as the actual loss Merriam Webster’s Dictionary of Law. Merriam… …   Law dictionary

  • valued policy — Insurance policy in which a definite valuation is by agreement of both parties put on the subject matter of the insurance and written in the face of the policy and such value, in the absence of fraud or mistake, is conclusive on the parties. One… …   Black's law dictionary

  • policy — The general principles by which a government is guided in its management of public affairs, or the legislature in its measures. A general term used to describe all contracts of insurance. See policy of insurance. This term, as applied to a law,… …   Black's law dictionary

  • Office of National Drug Control Policy — Seal of the ONDCP The White House Office of National Drug Control Policy (ONDCP), a former cabinet level[1] component of the Executive Office of the President of the United States, was established in 1989 by the Anti Drug Abuse Act of 1988. Its… …   Wikipedia

  • Intelligence and public policy — A large body of research indicates that intelligence measures such as Intelligence Quotient (IQ) varies between individuals and between certain groups, and that they correlate with socially important outcomes such as educational achievement,… …   Wikipedia

  • Energy policy of the United Kingdom — For energy use in practice, see Energy use and conservation in the United Kingdom The current Energy Policy of the United Kingdom is set out in the Energy White Paper of May 2007, building on previous work including the 2003 Energy White Paper… …   Wikipedia

  • Divorce law in Sweden —   Divorce Law in Sweden Legal Marriage Code 1987 Chapter 5 Parties Involved …   Wikipedia

  • Loss of chance in English law — refers to a particular problem of causation, which arises in tort and contract. The law is invited to assess hypothetical outcomes, either affecting the claimant or a third party, where the defendant s breach of contract or of the duty of care… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.