As the second hand price of ships fluctuates, it is common for individual ships to be rated with a base value on “full conditions”. Thereafter, if the ship’s price goes up, an “increased value” insurance can be taken out for “total loss only” (TLO) risks at a lower premium rating. The London Market limits increased value to 25% of the base value but other mechanisms such as “anticipated earnings” also exist to allow for additional TLO cover. Thus fluctuations in ships’ values can be economically catered for, the important thing being always to ensure that the aggregate valuation for insurance exceeds the reasonable market value of the asset. The method of assessing ship values is a matter of choice; some owners look at market resale prices only while others prefer to enhance this with an element of newbuilding replacement cost. Frequently, if a ship is subject to a mortgage, the lender stipulates a minimum value and their interest will be endorsed on the Policy. Ship managers should monitor the sale and purchase market and consult with owners as values fluctuate to ensure that their ships are properly covered. When considering Hull and Machinery marine insurance policy terms, it is important to bear in mind that there are a number of different versions. London conditions are widely used, these being set out in the “International Hull Clauses” (IHC). However, for example, American Institute Hull Clauses are also used as are various Scandinavian conditions such as the Norwegian Plan. Some large shipping companies have been able to negotiate modifications to the standard conditions. It is important that ship managers are aware of the various types of cover available in the market and of the main differences between them. It should also be remembered that London conditions are subject to the UK Marine Insurance Act of 1906.