Which policy pays a fixed amount upon a listed loss, regardless of the actual value?

• A. Binder
• B. Direct-action statute
• C. Valued policy
• D. Incontestable clause

Answer: (C)

A valued policy fixes the insured value in advance and pays that fixed amount if a listed loss occurs, regardless of what the property is actually worth at the time of loss. This arrangement provides certainty to both sides when the item’s value is hard to determine or can fluctuate, since the payout isn’t tied to the measured loss after the fact. Other options don’t set a guaranteed payout independent of actual value—binders are temporary coverage, direct-action statutes relate to suing the insurer, and incontestable clauses limit defenses after the policy period.