In the event a policy has an agreed amount for a building, let's say it's $100,000 and a wind deductible of 2% but the property is valued at $150,000.  Does the deductible apply over the $100,000 or the $150,000?

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Agreed value is also referred to as agreed amount. The agreed value endorsement in a property insurance policy waives the coinsurance clause. Coinsurance does not get applied at all if there is an agreed value statement on the policy.

Generally, insureds add the agreed value endorsement in the chance that their property value may be valued less than its actual value. Then the agreed value endorsement would give them the entire amount that is stated on the agreed value endorsement if there is a total loss, regardless of its actual value.

For example, if a building is insured on an agreed value endorsement for $150,000 but its actual value was $100,000, then if there is a total loss the insured would recover the agreed amount of $150,000.

If in the instance the actual value of the building was $200,000, then the insured would still recover the amount of the agreed value of $150,000.

Commercial property policies have at least one deductible and that deductible typically is subtracted from the loss total before the claim payment is made. A standard property policy has a deductible that applies to fire, theft and “all other perils”, also known as the AOP deductible. Hurricane deductibles apply separately for a higher amount than the AOP deductible.  The deductibles may be stated on the Declarations as a percentage of values or as a dollar amount. Typically, the deductible will apply only to the damaged building(s) and not the total insurable values at the covered location. Each of these deductible types generally apply per occurrence.

In the situation of the agreed value building, the wind deductible will apply to the damaged loss rather than the insured value of the building. In the described scenario, if the damaged loss is less than $100,000 then the deductible will apply to the amount of the damaged loss; if the damaged loss is greater than $100,000 then the deductible would apply to $100,000 as this is the total insured amount.

For more information on applying wind and hurricane deductibles, refer to this article: Deciphering Wind Deductibles.