What is the primary purpose of a "statement of values" in insurance?

The primary purpose of a "statement of values" in insurance is to provide a detailed list of all insured property and its values. This document is crucial for both the insurer and the insured as it outlines precisely what is covered under the insurance policy, along with the corresponding values assigned to each item or group of items. This clarity helps ensure that the coverage is adequate and assists in determining appropriate premium amounts.

Having a comprehensive statement of values is essential during the underwriting process. It allows insurers to assess risk accurately and enables them to determine appropriate coverage limits. In the event of a claim, the statement also serves as a reference point to ensure that claims are settled based on the agreed-upon values, thereby facilitating a smoother and more transparent claims process. This documentation helps to avoid disputes during claims settlement, as both parties have a clear understanding of what is insured and at what value.