Property insurance in regard to which the amount to be paid on a total loss has not been agreed. The parties fix a sum insured representing the insurer’s maximum liability otherwise claims are to be dealt with on an indemnity basis subject, often, to pro rata average. Marine Insurance Act, s.16, provides a basis of valuation for the insurance of hulls, cargoes and freight, etc., which, in the absence of any agreed value, must be used for the purpose of indemnifying the insured. Hulls and cargoes are invariably insured under valued policies but freight is generally insured under unvalued policies. See VALUATION CLAUSE.
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A property insurance policy where the sum insured has not been agreed by the insurer in advance as the actual value of the property. In the event of a loss, therefore, the value is open to discussions with a view to the insured being indemnified against his true loss up to the sum insured.