American Institute Hull Clauses
The question then arises-whether the ‘‘top down’’ system of allocation of recoveries from third parties has any application to cases of marine insurance, as some practitioners have feared. Although the House of Lords did not deal with this particular issue, it was addressed by Stoughton LJ in the Court of Appeal. He said: ‘‘By s. 81 of the Marine Insurance Act, 1906, where the insurance is for less than the insurable value, the assured is deemed to be his own insurer for the balance. Recoveries are then divided pro rata’’.92 In accordance with this dictum, and relying on the case of The Commonwealth,93 it appears to the authors that IHC 1/11/03 has boldly restated the traditional view of marine insurance law and practice with respect to recoveries from third parties.