As per MIA 1906 article 16 Measures of Insurable Value para (3) practicing the meaning of, should make the following notice:
The effect of this clause, which is based on the Clause that appeared in certain specialized Institute Trade Clauses, is to oblige the assured to provide the full values to his insurers where he has taken out increased value insurance. The insurers will then share any claims pro rata if the increased value clause appears in both policies. This is far more likely now that the increased value clause appears in the standard Institute Clauses rather than merely in certain Institute Trade Clauses. This serves to resolve the issue on “businesslike lines” So far as recoveries are concerned, where there are increased value insurers, and both insurers have this clause in their policies, it will entitle the increased value insurers to share rateably in any subrogated cargo claims against third parties and oblige the primary insurers to do so. Where the clause only appears in the increased value policy, the increased value clause will still be of no effect and the primary insurers under a valued policy will be entitled to the recovery up to the amount of the agreed value of the goods.
Where the clause appears only in the primary insurance, but not in the increased value insurance, which is less likely, it would seem that the increased value insurers can share pro rata as the primary insurers have agreed to give up their sole rights to the recovery allowing the increased value insurers to be subrogated to the assured’s rights. In those relatively rare cases where the second policy is taken out after the casualty, whether that policy be a primary policy or, more likely, the increased value policy, it would appear that the primary insurers are entitled to the recovery up to the agreed amount of the goods even if the increased value clause is in both policies.
