Marine Insurance: complex and much disputed (P2)

Compensation for total loss (cont.)

Thus, the insurance amount is less than the insured value in the event of a total loss of a part of the insured; the compensation will be calculated based on smaller numbers.

Compensation for partial loss of ship

The main difficulty comes from the partial loss related to the insured value, so practice as well as principle, all trying to find ways to solve this problem.

After all, the intention of the ship owner when buying the insurance is to protect for the cost of repairing the ship when lost and this is also the main objective of the single hull insurance.

Thus, in case of damage caused by a ship directly insured, the method of compensation would be reasonable repair costs.

It should be noted that the vessel is insured based on the value or no prescription insurance or valuation price is not important, but what essential here is only the insured must prove that the charge of damage repair is reasonable so that the insurer shall be liable for that amount.

Even MIA 1906 protects the insurer by requiring repair costs must be reasonable, but in practice it will be difficult to determine what is reasonable. Thus, the single-hull insurance usually includes a clause that set the conditions for the insured in case of an accident, or incident. Accordingly, a complaint can claim under the insurance policy.

A ship uncorrected would be worth less than the ship in condition if the ship is intact and undamaged, the entire ship will be devalued by the time the insurance expires.

Thus, if the insured wants to insure to the ship, the insured value of the vessels will be lower, which means that although the insured does not have to bear the cost of repairs, they suffer losses by reducing the value of the ship?

Compensation for partial loss of goods

We know that, if goods are damaged, the entire insurance will be compensate by the insurer, so the logic goes, when one part of total  cargo loss, the insurer will have to compensate the insured price value of the goods that are damaged.