The insured can recover from the underwriter a loss to the extent of the insurable value of the property insured if it was an unvalued policy. In case of a valued policy, the assured can recover the loss to the full extent of the value fixed by the policy.

Subject to the average-clause, where there are two or more underwriters, they shall bear the loss in the proportion of their subscription.

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Successive Losses:

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The underwriters are generally not liable for more than the insured value; but they may be liable for successive losses which may in the aggregate exceed the insured value, by payment of extra premium and stamp duty. This provision is made by ‘reinstatement clause’.

Where there is partial loss which has not been repaired or otherwise made good is followed by a total loss, the assured can recover only the total loss. For example, where a damaged ship in an unrepaired state is lost, the insurers are liable only for total loss and not for unrepaired damage.

Other Charges :

The amount of claim cannot include survey fees, cost of certificates and professional average adjuster’s fees. Once the claim is proved to be recoverable, these charges can be recovered in full from the underwriters. The ‘Sue and Labor’ clause defines the procedure of payment of the expenses.

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Expenses incurred by or on behalf of the assured for the safety or preservation of the subject-matter insured, other than general average and salvage charges, are called particular charges.

The underwriter is liable for particular charges and other expenses properly incurred per sent to the provision of the suing and laboring clause in order to avert a loss insured against.

Effect of Over-Insurance and Under-Insurance :

If two or more policies are affected by or on behalf of the assured on the same adventure and interest or in respect of any part thereof, and the sums insured exceed the minimum amount allowable as indemnity, the assured is said to be over-insured. Where the assured is insured for an amount less than the insurable value, he is said to be under -insured.

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In this case, he is deemed to be his own insurer in respect of the uninsured balance. Where the assured is over-insured, each insurer is bound as between himself and the other insurers to contribute rate ably to the loss in proportion to the amount for which he is liable under his contract.

Subrogation :

Where the insurer pays for a total loss, either of the whole, or in the case of goods, of any apportion able part, of the subject-matter insured, he thereupon becomes entitled to take over the interest of the assured in, whatever may remain of the subject-matter so paid for, and he is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject matter.

Subject to the foregoing provisions where the insurer pays for a partial loss, he acquires no title to the subject matter insured, or such part of it as may remain.

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But he is thereupon subrogated to all rights and remedies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnified. The right of subrogation ensures that the assured should not make a profit out of the contract.

Salvage :

The salvage is the remuneration or reward payable according to maritime laws to salvers who voluntarily and independently of contract render services to maritime property at sea.

Salvage charges insured in preventing a loss by perils insured against may be recovered as a loss by those perils. The salvage awarded to salvers is apportioned over the values saved. This charge is not recoverable from marine underwriters.

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Claims and ‘Cause Proximal’ :

In determining the amount of the loss, the rule of Cause Proximal Non Remote Spectator is applied. It means that when there is more than one cause for the loss or damages the proximate cause and not the remote cause is regarded.

The underwriter will pay the amount of loss only when the real or the proximate cause is insured. The peril insured against must be the proximate cause of the loss and it must not be due to the fault or misconduct of the insured.

The insurer is not liable for any loss attributable to the willful misconduct of the assured, but unless the policy otherwise provides, he is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew.

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Unless the policy otherwise provides, the insurer on ship of goods is not liable for any loss proximately caused by delay although the delay be caused by a peril insured against.

Unless the policy otherwise provides, the insurer is no liable for ordinary wear and tear, or denary leakage and breakage, inherent vice or nature of the subject-matter insured or for any loss proximately caused by rate or vermin or for any injury to machinery not proximately caused by maritime perils.