Section 27 of the UK Marine Insurance Act sets out the rules on valued policies. A valued policy is a policy that specifies the agreed value of the subject matter insured, and the section provides that, in the absence of fraud, the value fixed by the parties is conclusive of the insurable value under the policy regardless of the type of loss. Section 67 provides for the measure of indemnity separately for unvalued and valued policies: for an unvalued policy, up to the full insurable value, and for a valued policy, up to the full value fixed by the policy. Where there are several insurers, each is liable under a valued policy in the proportion that the amount of his subscription bears to the value fixed. Section 68 provides that, for a total loss, subject to any express provision in the policy, the measure of indemnity under a valued policy is the agreed value, and for a partial loss of goods, merchandise or other movables insured under a valued policy, the insurer is liable for that proportion of the agreed value.

Article 670 of the Commercial Act sets out the rules on valued insurance, providing that where the parties have fixed the insured value, that value is presumed to be the value at the time of the accident. However, where the agreed value considerably exceeds the actual value at the time of the accident, the value at the time of the accident becomes the insured value. Article 696 provides that in insurance on a ship, the value of the ship when the insurer's liability begins is the insured value, and Article 698 provides that in insurance on profits or commissions expected from the arrival of cargo, if the insured value was not fixed by contract, the sum insured is presumed to be the insured value. Korea's marine insurance law can therefore be interpreted as using a relative rather than an absolute concept of valued insurance.

Regarding over-insurance under Korea's Commercial Act, the UK Marine Insurance Act has no identical provision, but its rule that the agreed value is the insurable value only in the absence of fraud can be read as having a similar meaning. Comparing Article 670 of the Commercial Act on valued insurance with Section 27 of the UK act, the UK pays the fixed value for any considerable excess regardless of total or partial loss, whereas Korea's Commercial Act provides that only the actual loss is paid when the loss falls considerably short of the agreed value, showing the character of relative valued insurance and marking a difference between them.

This paper has examined the meaning and basic features of marine insurance and looked in detail at the principle of the fixed insured value in marine insurance. Because marine insurance developed in the UK, Korean law shares features with the UK Marine Insurance Act, but as the provisions on valued insurance show, Korea applies a conditional valued insurance rule unlike the UK act, which in my view raises problems with its nature and fairness.

To add: Article 670 of the Commercial Act presumes that the insured value fixed by the parties is the value at the time of the accident, but where that value considerably exceeds the value at the time of the accident, the value at the time of the accident becomes the insured value. Section 27 of the UK Marine Insurance Act 1906 treats the agreed value as conclusive in the absence of fraud, and although the Insurance Act 2015 substantially changed the rules on disclosure and warranties, the valued policy rule was kept. Policies governed by English law are widely used in Korean marine insurance practice, so comparison with English law also matters in real disputes.