Section 2. INSURABLE VALUE AND SUM ASSURED

Article 232.- Insurable value
Insurable value is the real value of the subject of insurance and determined as follows:
1. The insurable value of the seagoing vessel is its total value at the commencement of the insurance. This value also includes the value of its machinery, equipment, spare parts and stores plus the whole insurance premium amount. The insurable value of the seagoing may also include money advanced for crew’s wages and other disbursements incurred to make the ship fit for the voyage as agreed upon in the policy.
2. The insurable value of the cargo is its value invoiced at the place of loading or its market value at the place and time of loadling plus the insurance premium, the freight and may include the expected profit;
3. The insurable value of the freight is the gross amount of freight plus the insurance premium. Where the charterer has the freight insured, this amount of freight is included in the insurable value of the cargo for insurance;
4. The insurable value of any other subject of insurance, except obligations arising under civil liability, is the value of the subject of insurance at the place and time of the commencement of the insurance, plus the insurance premium.

Article 233.- The insured sum
1. Upon concluding a contract of marine insurance, the assured must declare the sum for which the subject of insurance is insured (hereinafter referred to as the insured sum).
2. Where the insured sum as specified in the contract is lower than the insurable value, the insurer shall be liable for losses in such proportions as the insured amount bears to the insurable value, including other expenses under the insurance.
3. Where the insured sum as specified in the contract exceeds the insurable value, the amount in excess of the insured sum shall not be accepted.

Article 234.- Double insurance
1. Where two or more policies have been concluded by the assured or his/her representative for the same subject of insurance against the same maritime peril for the insured sums which in aggregate exceed the insurable value, the assured shall be deemed to have been overinsured by double insurance.2. In case of double insurance mentioned in Clause 1 of this Article, all such insurers shall be liable only up to the amount of the insurable value, and within limit of that value each of them shall be liable in proportion to the insured sum accepted by such insurer.

Chapter XVI
CONTRACTS OF MARINE INSURANCE

Section 2. GENERAL PROVISIONS

Article 224.- Contracts of marine insurance
1. A contract of marine insurance is a contract of insurance for maritime perils whereby the insurer undertakes to indemnify the assured, in the manner and under the conditions agreed in it, against marine losses covered by insurance.
Maritime perils mean the perils incidental to the navigation of the sea, including perils of the seas, fires, explosions, war perils, pirates, thieves, attachments, captures, seizures, detentions, jettisons, acquisitions, requisitions, compulsory purchases, illegal acts and similar perils or any other perils as agreed upon in the insurance contract.
2. A contract of marine insurance may be extended in accordance with specific conditions or custom so as to protect the interests of the assured against losses occurring on inland waters or land or railway that may be incidental to a voyage.
3. The contract of marine insurance must be concluded in writing.

Article 225.- Subjects of marine insurance
A subject of marine insurance may be any material interest related to maritime shipping activities and appraisable in terms of money, including seagoing vessel, seagoing vessel in course of building, cargo, freight, passage money for the carriage of passengers, charter-hire, hire and purchase money, expected profit on cargo, commission, general average costs, obligations arising under civil liability and sums of money secured by vessel, cargo or freight.

Article 226.- Identification of insurable interests
1. A person with an insurable interest is a person who is interested in a subject of insurance in a sea voyage.
2. A person is interested in a sea voyage when he/she has grounds to prove that he/she has any relation to the voyage or to any subject of insurance at risk in it, in consequence of which such person may benefit by the safe and due arrival of the subject of insurance, or may not benefit by its loss or by damage to it or by the detention of it, or may incur liability in respect of it.
3. The assured must have interest in the subject of insurance at the time of occurrence of the loss though the assured need to be interested in the subject of insurance when the insurance is effected. When the subject of insurance is insured under the “lost or not lost” condition, the assured may recover although the assured may not have acquired that interest until after the loss occurred, unless the assured was aware of the loss and the insurer was not.
Where the assured has no interest in the subject of insurance at the time of occurrence of the loss, the assured cannot acquire interest by any act or selection after the assured is aware of the loss.
4. Where the buyer of goods has insured them, the buyer shall have an insurable interest, even though the buyer might have rejected the goods or have treated them as at the seller’s risk, by reason of the latter’s delay in making delivery or otherwise.

Article 227.- Reinsurance
1. The insurer may reinsure to another insurer the subject of insurance which the insurer has accepted to insure.
2. The contract of reinsurance is independent from the original contract of insurance while the original insurer shall be still responsible to the assured.

Article 228.- Marine policy, insurance certificate
1. At the request of the assured, the insurer shall be obliged to issue to him/her a marine policy or insurance certificate. The marine policy or certificate shall constitute en evidence of the conclusion of the contract of marine insurance.
2. A marine policy may be issued in the following forms:
a. Voyage policy, which is a policy issued to a subject of insurance from one place to another or others;
b. Time policy, which is a policy issued to a subject of insurance for a definite period of time;
c. Valued policy, which is a policy in which the insurer has agreed in advance to the value of the subject of insurance as specified in the policy, which is compatible with the insurable value and shall be used for indemnification for total or partial loss.
Unless the policy otherwise provides, the value specified in the policy and the provisions of Clause 1,
Article 254 of this Code shall serve as a basis for determining whether there has been a constructive total loss.
d. Unvalued policy, which is a policy that does not specify the value of the subject of insurance, but, specifies the sum insured.
3. A marine policy should contain the following basic details:
a. The name of the assured, or of the assured’s representative;
b. The subject of insurance;
c. The insurance conditions;
d. The period of time covered by the insurance;
e. The sum insured;
f. The place, date and hour of issue of the policy;
g. The insurer’s signature for certification.
4. The forms and basic details of a marine policy shall apply to insurance certificates.

Article 229.-Obligations of the assured
1. The assured shall be obliged to inform the insurer of all information which the assured has known or should have known in relation to the conclusion of the contract of insurance, and may affect the assessment by the insurer of the possible risk or the decision by the insurer as to whether or not the insurance proposal and the terms of the contract should be accepted, except information which is common knowledge or has been known or should have been known to the insurer.
2. The obligation of the assured specified in Clause 1 of this Article shall be also applied to the assured’s representative.
Article 230.- Automatic invalidation of contracts of marine insurance
A contract of marine insurance shall automatically become invalid if at the time of its conclusion the peril covered by insurance has already occurred or where the possibility of its occurrence does not exist in reality; in this case, the insurer shall not have to indemnify but shall retain the right to the insurance premium as contracted, unless before concluding the contract, the insurer knew about such event.

Article 231.- The right to terminate contracts of marine insurance
1. Where the assured intentionally commits a breach of his/her obligation set out in Article 229 of this Code, the insurer shall have the right to terminate the contract. Where the assured fails to provide information or provides inaccurate information according to the provisions of Article 229 of this Code not due to his/her fault, the insurer shall have no right to terminate the contract, but may request a reasonable increase of the insurance premium.
2. Before the commencement of the insurance liability, the assured may request the termination of the contract of marine insurance, provided that he/she pays the insurer all administrative costs, and the insurer must refund the insurance premium to the assured.
3. The insurer and the assured must not terminate their contract once the insurance liability has commenced, unless otherwise agreed upon in the contract.
Where it is agreed in the contract that the contract may terminate after the insurance liability commences and the assured requests termination of the contract, the insurer shall have the right to the insurance premium from the date of commencement of the insurance liability to the date of termination of the contract, and the refunded premium shall correspond to the remaining time. Where the insure requests termination of the contract, the insurance premium amount of the remaining time shall be refunded to the assured for the period of time from the date of request for termination to the date of expiration of the contract.4. The provisions of Clause 2 of this Article shall not apply to the case where the assured requests termination of the cargo or voyage policy for the seagoing vessel after the commencement of the insurance liability.