ABSTRACT
The rule that the agreed value in a valued policy is binding and conclusive is firmly established. It was always thought that the value should never go beyond what is ‘reasonable and fair,’ and the assured is meant only to have an ‘indemnity’, the very basis of a contract of insurance.18 Admittedly, it is, of course, difficult at any given time to be exact or precise about the value of the subject-matter insured. A margin of error is bound to occur, and the courts are generally prepared to overlook any difference between the real and the agreed value provided that it is not grossly or outrageously excessive. Not all overvaluations will be tolerated by the courts, and there are, as will be seen, more than ample grounds upon which the courts may set aside an agreed valuation which is excessive. What constitutes excessive over-valuation is a question of fact.
