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Valued vs Unvalued Policy
What is the difference between a valued policy and an unvalued policy?
A valued policy is a policy in which the insurer agrees in advance on the value of the subject matter insured and it shall be conclusively taken as the value of the subject matter when it is damaged.
An unvalued policy is a policy which does not specify the value of the subject matter insured, but is subject to the limit of the sum insured. It leaves the insurable value to be ascertained by specified means in advance.
When will we issue a valued policy and an unvalued policy?
Usually, cargo policy may either be valued or unvalued. It depends on the nature of trading and the type of commodity. Policies that cover fine arts, antiques, jewellery or personal property will usually be treated as valued policy as they tend to involve sentimental value.
If you wish to insure the branding value, assessment of a masterpiece, item with historical value or even personal items, since the policy is valued, you should ensure that the sum insured represents the new replacement value at destination. Based on this declared value, you will have full protection from the insurer.
There may be some cases in which customers escalate the value of the item to get a higher sum insured for a minimum premium. Please be reminded that in case of claims, indemnity may not be in the form of cash; the insurance company can also reimburse the product to you.