what is valued policy law 
valued policy law vpl is a legal statute that requires insurance companies to pay the full value of a policy to the insured in the event of a total loss valued policy law does not consider the actual cash value of the insured property at the time of the loss instead the law mandates total payment 1a valued policy differs from an unvalued or open insurance policy in which the value of the property would need to be proven subsequent to a loss through the production of invoices estimates claims adjusters or other evidence understanding valued policy lawa total loss is a loss that occurs when an insured property is destroyed or damaged to such an extent that it can be neither recovered nor repaired for further use 2 often a total loss triggers the maximum settlement possible according to the terms of the insurance policy insurance policies generally use one of two methods to determine the value of a loss actual cash value or replacement cost 3in general valued policy laws require that the amount stated in policy declarations shall be dollar amount paid to the insured at the time of loss if the value of an insured item at the time of loss is less than the amount of insurance the insurer has no recourse to contest payment in full moreover in most valued policy states any policy provision inconsistent with the valued policy law is considered void 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 4wisconsin was the first state to pass a valued policy law in 1874 5valued policy law controversyhurricane 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 6 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 