With actual cash value, the insurance company can use their jeweler to replace your item. After a loss, you can elect to receive cash instead of the jewelry item, but you will receive an amount that the company’s jeweler says would replace your item. This may be lower than your local jewelry store.
With Agreed Value, you may elect to receive the amount of insurance you are maintaining or replacement of the item from your jeweler. An agreed value premium is usually about 30% higher than the premium for actual cash value.