Insured Value

Insured Value is a core term in international trade and transport insurance, referring to the actual value of the insured subject matter to the insured, usually calculated on the basis of the CIF (Cost, Insurance and Freight) price of the goods plus expected profit (generally 10% of the invoice amount). Usage scenarios mainly include: when importers and exporters insure cargo transport insurance with an insurance company, they need to specify the insured amount (usually 110% of the CIF price), which is determined based on the insured value; when cargo loss or damage occurs, the insurer's compensation is capped at the insured value. Notes: Insured Value is not equivalent to Insured Amount; the former is the actual value of the subject matter, while the latter is the amount declared by the applicant to the insurer, and the two may differ due to underinsurance or overinsurance; if the insured amount is lower than the insured value, compensation shall be made proportionally. The difference from 'invoice value' is that insured value may include freight, insurance premium and expected profit, while invoice value only reflects the transaction price of the goods. Foreign trade practitioners should accurately declare the insured value to avoid insufficient compensation due to underreporting or wasted premiums due to overreporting.