Basis of Valuation in Marine Insurance
The basis of valuation in marine insurance is a method used to determine the value of insured goods, ships, or cargo.
It represents the amount agreed upon by the insurer and insured for calculating insurance premiums and claim payouts in case of loss.
The basis of valuation can be pre-agreed upon between the insured and insurer at the policy's issuance, or determined after the loss or damage to the cargo or vessel.
Defining the basis of valuation is crucial in marine insurance as it decides the claim amount in case of loss or damage.
Understanding the concept of basis of valuation is essential for exporters who have marine insurance in place.
Author's summary: Basis of valuation decides claim amount.