Declared value may refer to:
- Value of a shipment as declared by the shipper to be used as the basis for computing freight charges, limiting the carrier's liability for damage, loss and delay. It usually reflects the cost of the shipment and normally is lower than the declared value for customs.
- Building declared value meaning the insured's assessment of the cost of reinstatement of the property insured at the inception of the period of insurance.
In the shipping glossary the declared value is the the value per unit of a shipment as stated by the shipper upon delivery to a carrier. In other words, the declared value is the amount we inform the carrier the shipment is worth and that must be assigned to every domestic and international shipment. The declared value can be listed below the sale price or it can be at a discount from the actual amount that was paid for the item by the customer. However, the amount specified by shipper is the maximum amount the carrier is liable for if damages or loss occur.
According to the information provided on shipping companies websites, if the item with the declared value lower than actual worth of item is lost or damaged, the shipping company will cover up to the amount that was specified as the value.
In the area of shipping and customs the declared value means the value of a shipment that was declared by its shipper in order to serve as the basis for computing freight charges and for limiting the carrier's liability for loss, damage or delay. The declared value usually reflects the shipping cost price, the selling or the replacement price of the shipment and is normally equal to or higher lower than the declared value for customs and carriage. U.S. Code of Federal Regulations states that the declared value of imported goods should be the value at which goods are declared by the importer to the county’s customs service at the date of entry into the customs territory of the country.
About 40 countries, mostly in the least-developed group, use the service of so-called preshipment inspecition (PSI) companies to support customs authorities in detecting imported goods undervaluation or overvaluation and other malpractices with the aim of reducing customs duties. Such companies inspect goods physically to make sure they conform to the contract terms.
The building declared value is the value of the property, what means the bricks and mortar and everything else that’s fixed to the property, including such things as fitted kitchens and bathrooms on the day the policy starts. The declared value of the building doesn’t take into consideration the land value or the desirability of the area. It should represent the total cost of re-building including damage to car parks, outbuildings, professional fees and all costs to comply with local and European Union legislation. It should also include allowance for debris removal costs. The sum insured figure is higher than the building declared value to cover against the rise in price of building materials or inflation over the period of insurance.
Example: on the last day of the policy the price of bricks may be 15% higher (as forecasted) and the building declared value provided on day one of the policy could be much lower than the actual rebuilding costs calculated on the last day. The person insured needs to state the declared value meaning the insured's assessment of the cost of reinstatement of the property insured at the inception of the period of insurance.
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Author: Aleksander Szafraniec