Valued Insurance

Valued Insurance is a special arrangement in international trade cargo transport insurance, where the insured and the insurer agree in advance on a fixed insured value (usually the CIF value of the goods plus 10%), which serves as the basis for the insured amount and compensation calculation. Its core feature is that regardless of whether the actual value of the goods rises or falls at the time of loss, compensation is made according to the agreed value without re-assessment. It is commonly used for goods with high value fluctuations or difficult valuation, such as artworks, antiques, and precision instruments, and is also widely used in marine and air cargo insurance. Note: Valued Insurance is not over-insurance; the agreed value should be reasonable. If the actual value is far lower than the agreed value, it may be deemed a gambling contract and invalid. The difference from Unvalued Insurance is that the latter only specifies an upper limit of the insured amount and compensates proportionally based on actual value at the time of loss, while Valued Insurance directly pays full compensation for total loss and proportional compensation for partial loss according to the agreed value. Foreign trade practitioners should clearly stipulate Valued Insurance clauses in contracts to avoid claim disputes.