§53906 — Title 46 Shipping | U.S. Code

Summary

Requires hull insurance to use a single value for a total loss that the Secretary of Transportation sets. That value must leave out any defense equipment paid for by the U.S. government and cannot be higher than what the government would have to pay if the vessel had been requisitioned under chapter 563 when coverage started. Stated valuation: value set by the Secretary. Asserted valuation: value the owner names if they reject the stated valuation. Within 60 days after coverage starts or after the Secretary sets the value (whichever is later), the owner can reject the stated valuation and pay premiums based on their asserted valuation (which won’t bind the Government later). If the owner keeps the stated valuation, any claim cannot exceed it. If the owner rejected it and the vessel is totally lost, they get 75 percent of the stated valuation as a temporary payment and may sue the United States to recover any larger amount a court finds would have been payable under chapter 563; premiums are then adjusted to match the court’s decision.

Title 46, §53906

Shipping — Source: USLM XML via OLRC

(a)The valuation in a hull insurance policy for actual or constructive total loss of the insured vessel shall be a stated valuation determined by the Secretary of Transportation. The stated valuation—

(1)shall exclude national defense features paid for by the United States Government; and

(2)may not exceed the amount that would be payable if the ownership of the vessel had been requisitioned under chapter 563 of this title at the time the insurance attached under the policy.

(b)Within 60 days after the insurance attaches under a policy referred to in subsection (a) or within 60 days after the Secretary determines the valuation, whichever is later, the insured may reject the valuation and pay, at the rate provided in the policy, premiums based on the asserted valuation the insured specifies at the time of rejection. However, the asserted valuation is not binding on the Government in any subsequent action on the policy.

(c)If a vessel is actually or constructively totally lost and the insured under a policy referred to in subsection (a) has not rejected the stated valuation determined by the Secretary, the amount of a claim adjusted, compromised, settled, adjudged, or paid may not exceed the stated valuation. However, if the insured has rejected the valuation, the insured—

(1)shall be paid, as a tentative advance only, 75 percent of the stated valuation; and

(2)may bring a civil action against the United States in a court having jurisdiction of the claim to recover a valuation equal to the just compensation the court determines would have been payable if the ownership of the vessel had been requisitioned under chapter 563 of this title at the time the insurance attached under the policy.

(d)If a court makes a determination as provided under subsection (c)(2), premiums paid under the policy shall be adjusted based on the court’s determination and the rates provided for in the policy.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 5390646 App.:1289(a)(2).June 29, 1936, ch. 858, title XII, § 1209(a)(2), as added Sept. 7, 1950, ch. 906, 64 Stat. 775; Aug. 3, 1956, ch. 929, § 1, 70 Stat. 984; Pub. L. 88–478, § 1, Aug. 22, 1964, 78 Stat. 587. In subsection (c), the words “Provided, That in the event of an election by the insured to reject the stated valuation fixed by the Secretary and to sue in the courts, the amount of the judgment will be payable without regard to the limitations contained in section 1242–1 of this Appendix, although the excess of any amounts advanced on account of just compensation over the amount of the court judgment will be required to be refunded” are omitted as obsolete because the section referred to, which was from the Department of Commerce and Related Agencies Appropriation Act, 1959 (Pub. L. 85–469, 72 Stat. 231), has been omitted from the United States Code as obsolete.

§53906 Hull insurance valuation

Summary

Title 46, §53906

Notes & Related Subsidiaries

Historical and Revision Notes

Citations & Metadata