What is the agreed value requirement for Gold features?

The agreed value requirement for Gold features stipulates that the figure should fall between Actual Cash Value (ACV) and Replacement Cost (RC), while also ensuring it is no less than 5% of the Replacement Cost. This requirement is designed to provide a balance between coverage and cost, reflecting a compromise between the two extremes of ACV and Replacement Cost.

By setting the minimum at 5% of the Replacement Cost, the policy maintains a level of protection for the insured, ensuring that in the event of a claim, they receive a payout that acknowledges the depreciation of the asset alongside a baseline value that provides adequate compensation. This approach helps to avoid potential underinsurance while also ensuring that insured parties are not left overly exposed in the event of a loss.

Other options may present alternative methods of valuing coverage but do not align with the specific requirement of ensuring a minimum of 5% of the Replacement Cost. Therefore, they do not fully capture the essence of the Gold feature's agreed value requirement.