What is the increased value cover in marine hull insurance?

Traditionally, under the “Marine Insurance Act”, Hull insurance covered the market value of the ship and, atthe same time, the shipowner’s “insurable interest”. Any cover in excess of market value was prohibited.Shipowners successfully demonstrated, however, that there were additional costs associated with replacement,beyond market value. It is now recognised that the assured has an additional insurable interest, inexcess of the vessel’s market value and in excess of the Hull insurance. Hull Interest cover was instituted asan excess cover, commonly known as “Increased Value” or “Hull Interest”. This was originally confined to TotalLoss Only cover, only paying the agreed amount when the vessel was a total loss according to the Hull insurance