The insurable value may be determined by agreeing a certain amount (agreed value). The agreed value is also deemed to be the value of the insured interest on occurrence of the insured event, unless it considerably exceeds the actual insurable value at that point in time. If the sum insured is less than the agreed value, the insurer is only liable to compensate the loss in the proportion that the insurable value bears to the agreed value, even if the agreed value is considerably overstated.