Clause 18: Unrepaired Damage
18.1 The measure of indemnity in respect of claims for unrepaired damage shall be the reasonable depreciation in the market value of the vessel at the time this insurance terminates arising from such unrepaired damage, but not exceeding the reasonable cost of repairs.
18.2 In no case shall the Underwriters be liable for unrepaired damage in the event of a subsequent total loss (whether or not covered under this insurance) sustained during the period covered by this insurance or any extension thereof.
18.3 The Underwriters shall not be liable in respect of unrepaired damage for more than the insured value at the time this insurance terminates.
Comments to ITCH
Compensation for unrepaired damage is allowed, but not in the event of a subsequent total loss. The compensation is based on the depreciation in the market value of the vessel, but not exceeding the reasonable cost of repairs. Reasonable cost of repairs is determined at the time when repairs would have been effected, and not at the time of the loss.
Insurers’ liability will never exceed the insured value of the vessel at the time when the insurance terminates.
Comments to NMIP
Clause 12-2 gives the assured the same right as under ITCH to claim compensation for unrepaired damage, but with a deduction for estimated common expenses and for 50% of estimated dock and quay hire.
As under the ITCH, insurers do not cover pre-existing unrepaired damage in the event of a total loss, or if the vessel qualifies for condemnation under Cl.11-3 before the insurance terminates.