Report No. 21

Clause 73

General.-This deals with apportionment of valuation. The section obviously is confined to valued policies.

Application of the section.-The necessity for a section like this arises in the following cases:-

Supposing different species of property are insured under a valued policy; but the value of each species is not mentioned separately; then how is the value of each species to be taken in case of loss? If the policy is taken as unvalued, then there is no point in having entered a valuation. But, on the other hand, the valuation is a single one. What the section provides in effect is-the splitting up of the valuation, "apportionment". The single value is apportioned over the different species, that is, split up, "as in the case of an unvalued policy".1

The process is as follows:

(i) First find out the insurable value of the species (see section 16 of the English Act);

(ii) then find out the insurable value of the whole (section 16, English Act);

(iii) then find out the proportion between (i) and (ii) above. That proportion of the total insured value (which is already entered in the policy, the policy being a valued one) is taken as the insured value of the species.

This principle applies to species as well as to a part of a species.

"Net arrived sound value".-Where it is not possible to ascertain the value of the species by the test given above (because the various ingredients mentioned in section 16 of the English Act cannot be ascertained), a division of the valuation is made with reference to the "net arrived sound value" of the goods and their various species. "Arrived" values means the value of the goods when they arrive at the destination.

1. For unvalued policies, see section 16 of the English Act-clause 13.