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 earthquakes, fire, piracy, theft, etc.
While a 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 your time of need. You can analyze your business and make the correct choice when it comes to opting for 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 common causes of losses covered under the policy include wind, earthquake, rain, hail, fire, theft, vandalism, and damage caused by submerged or floating objects.
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 physical damage coverage, the key factor to consider is whether the coverage is based on “agreed value” or “actual cash value” for loss settlement.
Agreed value policies usually cover the amount shown on the insurance policy if there is a total loss. Under such a policy, the payout would be made after subtracting 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.
An actual cash value policy provides less coverage than an agreed value policy and is usually available at a lower price.
An agreed value policy provides thorough coverage, while an actual cash value policy is a more budget-friendly option suitable for those seeking an economical alternative.
4. What’s not in the coverage of Marine Insurance?
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’s feasible to make better decisions to secure your business from all sorts of losses or damages.
See more: 7 Reasons You Need Marine Insurance Next Journey
5. What are coverage limits?
Similar to other insurance policies, marine insurance policies also have limits, which are maximum amounts of coverage you can receive. Once you exceed the coverage limit, the insurer would not settle the remaining expenses. If you don’t buy sufficient insurance, you’re underinsured, and you’ll have to pay a significant amount out of your own pocket when you make a claim.
Seek out marine insurance experts
Now that you’ve grasped the main aspects of a marine insurance policy, we trust you’re better prepared to ask the relevant questions when purchasing 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 only when buying the policy but also when making a claim. Here, SecureNow has the expertise to assist you at every step.
