Would you do THIS for money? Cargo insurance deductibles revealed

Marine cargo insurance offers different types of coverage and different deductibles.

One way to lower your premium is to agree to a higher deductible so you take on more initial liability and the insurer takes on less. Another is to eliminate optional coverage lines that you might not need.

For instance, if you store your goods in an insured warehouse, you might not need storage coverage with your marine policy. Or you may have a $1,000 deductible, but claims due to theft may come with a $5,000 deductible.

All of these affect the cost of the monthly premiums you will pay. In general, the higher the deductibles and the more exclusions, the lower the premiums. The tradeoff, of course, is that if you have a claim, you will pay more out-of-pocket.

In case you read that far, means you care about paying less when cargo is damaged in transit.

Back in January 2020, I sat with the sugar trader to balance cargo insurance costs and losses below deductible they have been suffering for several years.

Here were his results for 2019

• Insurance policy with 10 000 USD deductible per BL.
• In 2019 he had 29 cases of cargo damages. Water ingress mainly.
• All incidents – below the deductible.
• And ZERO compensation claimed from the liable for damage party.

Here are the biggest trap exporters and importers fall when thinking that it is not worth to pursue cargo claims for compensation if cargo is insured. Or even worse, to absorb the loss for the first, second claim and end up the year with 29 damage cases. All losses out of the pocket.

Numbers show that financially is really worth to seek for compensation despite insurance policy, deductible amount or scope of coverage.

Finally, you know that moment when you find a crumpled 20USD bill in your coat pocket or the feeling of sunshine on your face on a cold day. The unexpected feeling of sweet potential that you can submit claim for compensation to get at least part of your deductibles back.

Ready for blast off?

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