In today’s industrial age, the importance of marine insurance has increased more than ever before. Whether it is an inland transit or export to a far-flung area, a marine insurance policy ensures the complete safety of the consignment and protects it against both natural and man-made perils, like earthquake, fire, piracy, theft, etc.
While marine insurance policy plays a crucial role in covering your shipments and consignment, it is essential to ask the following questions before buying the marine insurance policy. By asking the right questions before you purchase the policy, you improve your chances of having the right insurance coverage when you need it most.
1. How much coverage do you need?
Before purchasing the insurance, it is indispensable to know ‘how’ much coverage you should opt for. It’s disheartening to find out that you don’t have sufficient protection during the time of need. You can analyze your business and make the correct choice when it comes to opting for the coverage.
2.Physical Damages: What kind of losses are covered?
The best marine insurance policies offer ‘all risk’ coverage, which means that if the cause of the loss is not specifically excluded, then it will be covered under the policy. Some of the typical causes of losses that are covered under the policy are wind, earthquake, rain, hail, fire, loss or damage by theft, vandalism, submerged or floating objects, etc.
The number of events covered under the policy varies from one insurer to another, and therefore, take the time to compare the available policy options to avoid any surprises later.
3. Loss Settlement- Agreed Value Vs. Actual Cash Value?
When comparing the physical damage coverage, the most important factor that should be considered is whether the coverage is based upon “agreed value” or “actual cash value” loss settlement.
Agreed value policies usually cover the amount showed on the insurance policy if there is a total loss. Under such a policy, the payout would be made after deducting depreciation.
The actual cash value policy offers coverage up to the current market value of the vessel at the time of total loss, after taking into account depreciation and deductible.
In the case of actual cash value policy, though, the coverage is less than the agreed value policy, the policy is usually available at a low price.
While an agreed value policy offers comprehensive coverage, an actual cash value policy is apt for those who are looking for the economical alternative.
4. What’s not in the coverage?
A section of marine insurance policy lists exclusions as well. Your business doesn’t have coverage for those events or incidents which fall under the exclusion head. When you know your exclusions, you have a better understanding of your liabilities. You know your insurance policy won’t cover losses or damages stemming from these activities. With this information, it is feasible to make better decisions to secure your business from all sorts of losses or damages.
5. What are coverage limits?
Like other types of insurance policies, marine insurance policies also come with limits, which are caps on the amount of coverage you will get. Once you exceed the coverage limit, the insurer would not settle the remaining expenses. If you don’t buy enough insurance, you are under-insured, and you would have to pay a substantial amount from your pocket at the time of claim.
Seek out marine insurance experts
Now when you have understood the key elements of marine insurance policy, we hope you are in a better state to ask the right questions at the time of buying the policy. Also, it is wise to work with a corporate advisor that thoroughly understands your insurance requirements and the nitty-gritty of the policy. This is important not just at the time of purchasing the policy but also in the case of the claim as well. Here, SecureNow has the expertise to assist you at every step.