Real Estate Encyclopedia | Property Law Dictionary | Real Estate Terms | Meanings & Definitions |      Nov 12, 2019

unvalued policy

An insurance policy in which the value of the insured property is not specified but, in the event of a claim, is left to be determined on the basis of the actual loss suffered, i.e. any payment made under the policy is based on the strict principle of indemnity. "'An open or unvalued policy is one in which the value of the subject-matter is not fixed by the policy'. 26 Cyc. 573 § e II. … 'the basis on which the underwriters are to pay is left open, and the real value must be proved by the insured in each case' … Id. § b I. See also, 19 Am. & Eng. Ency. 2d Ed. 1046, XII, 1, b." Peninsular & O. S. S. Co. v. Atlantic Mut. Ins., 185 F 172, 174 (DC Pa 1911) (Morreale v. National Fire Ins. Co., 298 F.2d 96 (7th Cir. Ill 1962). Any sum that is referred to in an unvalued policy is intended merely as an upper limit to the insurer's liability, not as a representation of the amount for which the insured is covered. Real estate insurance policies are generally unvalued policies. A blanket insurance policy, which cover a number of properties, is usually 'unvalued', with the upper limit of indemnity varied as and when properties are added or removed from the policy. Also called an 'open policy'. cf. valued policy.

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