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Home » Moving Tips » Everything You Need to Know About Marine Insurance

Everything You Need to Know About Marine Insurance

Published on Dec 16, 2019 by Kfir Cohen

Marine insurance is an insurance policy provided to shipping, boats, and the cargo carried in them. But is marine insurance right for you?

Why You Need Marine Insurance

Like all other insurance policies, marine insurance policies aim to protect something that you own against potential losses. You pay a fraction of the cost or value of something that you own to ensure that you will replace it should something happen. Marine insurance is at its core just another type of insurance policy that protects your cargo at sea. There are two policies available for SDC International Shipping’s relocation customers: total loss insurance policies and damage to cargo insurance policies.

When you insure your home, you can ensure the physical building against damages to it from threats like fire, natural disasters, and so forth. You can also protect the contents of your home against additional threats like theft, loss. You can choose to insure both, as many people do. It is true not only of home insurance but many other types as well. For automobile insurance, you will have to purchase some sort of liability coverage. It depends on which state you live in. The insurance covers bodily damage and some minimum coverage of damage liability as a condition of your vehicle’s license. Most people will prefer to purchase a collision or comprehensive policy that will increase the coverage available for a long list of potential damages you might face.

Marine Insurance Differs Depending On Where You Live

Many people move their family’s valuable belongings from one country to another by boat. These policies are very different from the ones you may know. In the United States, each state issues its license, and while the guidelines are similar, the state controls and regulates them. In addition, there are international insurance companies that insure marine cargo. SDC International Shipping acts more or less as an insurance agent, arranging for our clients’ insurance policies with these companies. [It is important to stress that these companies don’t sell policies directly to the shipper, but insurance claims are made directly to them.]

The Need for Marine Insurance

Container cargo ships are wonders of modern technology. The new ones can transport over 20,000 20′ containers. Containers are constantly being moved at sea while the ship travels from port to port to minimize port time and adhere to tight schedules. These ships operate with only skeleton crews and are constantly at work. They don’t rest outside of routine maintenance.

While it would be nice to think that all of this automation means that we will transfer your container without any problems, mistakes and mishaps are common. For example, suppose you fly a lot. In that case, you know that suitcases get lost all the time. That is a far more straightforward process than sending a container from your old home in the United States to your new home in a different country.

Shipping Isn’t A Straightforward Process.

In a ship, we may move your container many times. In some cases, containers are even transferred from one vessel to another. That same container was either loaded at your house or our warehouse,

 trucked to the port, 

moved to a ship, 

shipped across the seas to another continent, 

taken off the ship, passed through customs, sometimes inspected, assigned to our destination teams, placed on another truck, and eventually delivered to your new home.

The Uncertainties Your Shipment May Encounter

Mechanical failure can cause damage to your container and your belongings within it. The ship, the port, the trucks, and their operators are not infallible. Nor are the operators of the equipment. While it is uncommon, damage occurs. Another occasional occurrence is piracy. Though they prefer to get ransom, there is no promise that cargo arrives intact.

Why You Should Choose SDC

Our movers are seasoned professionals with years of experience preparing personal belongings like furniture and fragile dishes for transport overseas. We will use top-quality materials to wrap your furniture, new cartons made especially for international marine transportation. We will carefully place your things in the shipping container in a manner that will ensure minimal movement. When necessary, we will secure items to the container walls. However careful our movers are, however, we are unfortunately not the only ones handling your cargo. In many locations, it is required that containers be emptied and your goods transferred to moving vans. Sometimes, there are manual inspections of containers (for most sites, this is done randomly to about 5% of the containers entering the port). For example, suppose you are sending an automobile or a motorcycle in your shipment for most locations. In that case, they are removed from your shipping container and delivered to licensing facilities near the ports. We will prepare your things as well as can be done, but it is impossible to promise that all of your items will arrive without any damage. Other things that might cause extra handling steps are putting your belongings into storage and later removing them. In addition, small vans are used in locations where moving trucks have difficult access.

You are not required to purchase marine insurance. It is entirely optional, and you can decide if you want it or prefer to go without it. Many of our clients decide that they don’t want to insure and that it is okay.

 Types Of Marine Insurance

There are several types of marine insurance. We, of course, are talking only about the insurance of your cargo. You can always ensure your shipment against total loss. Other types of insurance are called marine for anything that touches the water, like yachts and even ships. We help our clients getting insurance specifically for the shipment of personal effects and household goods in sea shipping containers. If you are shipping via air, we can also help you get insurance for that.

Total Loss Insurance

True to its name, total loss coverage will completely insure your entire shipment if it is destroyed or the container is lost (this does happen). For example, you would be covered if a stack of containers collapses and your belongings are destroyed. The amount you are insured for is the amount that you have declared in your customs declaration form.

Total loss insurance typically costs less than insuring your shipment against any risks. The policy usually covers either the entire loss or nothing at all.

All Risk Cargo Insurance Policies

You are covered for total loss and damages to portions of your shipment or individual items when all risk cargo insurance is purchased. SDC International Shipping goes to great lengths to ensure that your cargo will arrive undamaged across the ocean. We would like to promise no damage, but we can’t. We will handle your personal belongings many times regardless of whether you send a private container or a less than full container load (LCL) through a consolidation service. Even when you use SDC International Shipping’s groupage consolidation service, something could go wrong that is not in our control.

The Difference Between Total Loss And All-Risk Insurance Policies

When total loss insurance is purchased, you are either protected or liable to all losses. The insurance company will pay you the entire amount or not pay you anything. If one or two items in your shipping container are damaged, or a box or two go missing, these will be insured using all-risk cargo insurance. Even if you send a full container load (FCL) shipment, a box or two could go missing. If there is a manual inspection, your cargo needs to be transferred to storage or moving vans or shuttles. When your shipment goes into storage at the destination, it will be transferred to a facility unless stored for only a few days.

The Need For Automobile Insurance

You should also buy an insurance policy for any automobiles, motorcycles, and other licensed vehicles that you are shipping overseas. Your car may be shipped using a variety of methods. SDC’s relocation specialists work with you to figure out the most effective route to take. If you are sending both a motor vehicle and a household, it makes a lot of sense in most cases to send it in your shipping container. It is trendy as it is more convenient than sending separate shipments. In this case, just like any other valuables shipped, the motor vehicle needs to be secured in the container by moving professionals to be insured. As placing a car into the container requires a unique lift, our movers will be there to prepare the vehicle. Please note that vehicles need to be clean, empty, the battery disconnected, and fluids drained.

What You Need To Know About Automobile Shipment

SDC International Shipping has clients that will send only a car, without any household goods. These are sometimes sent together with other automobiles in dedicated automobile containers. Other vehicles like full-sized pickup trucks, RV’s, and even boats sent on their trailers are also sent via marine cargo. These are sent using a method known as RO-RO, or roll-on roll-off, which allows for larger vehicles that won’t fit into a shipping container. When a vehicle is sent using the RO-RO method, you should insure it separately from the remainder of your shipment.

Suppose you want to purchase an all-risk cargo insurance policy. In that case, you will have to have SDC International Shipping’s professional movers pack and load your shipment. In addition, you will have to let us do all of the preparations for you if you want your shipment protected against damage. On the other hand, suppose you have decided that you prefer to pack your shipment by yourself. In that case, you will still be able to purchase a total loss insurance policy.

Please note that your insurance should be consistent with your customs declaration. You will need to declare what you are insuring, along with the value of these items. You don’t have to insure everything, but the insurance company will only repay you for the insured things. For instance, if you send a few towels and bedsheets boxes, you might decide that you don’t want to insure them. You might prefer to insure only your motor vehicle and expensive pieces. We recommend that you insure most of your furniture.

Insuring For Repurchase Cost

There is an exciting feature unique to marine insurance. You can ensure something for more than its value. Suppose you are moving to Europe from the United States. In that case, there is a perfect chance that you will choose to send your car or motorcycle in your container, as they are far more expensive in Europe than they are in the states. Suppose you own a six-month-old Toyota Camry, a car that is very popular to send. In that case, your insurance will never pay you more than about $20K because this will be the car’s value. The fact that you bought a new one only a few months before purchasing the insurance is irrelevant. Your automobile insurance will pay up to the car’s value in the case of a total loss. However, if you needed to replace this car in France, the same model would probably cost about $40K. If you want to replace the car that you want, you should insure for the replacement value. Otherwise, you might find yourself with enough money for a six-year-old car in France instead of the six-month-old car that you sent. We have to emphasize that it will cost you more to insure for the higher replacement cost, but you can do so. The price of your insurance policy is based upon the value insured.

Insuring for the cost of repurchase relates to other items as well, not only automobiles.

One other thing that you have to keep in mind is that the insurance company might request proof of specific values. So if you are sending something precious, you might have to provide some sort of appraisal and be required to create the item.

Ask your SDC International Shipping relocation specialist to give you more details about marine insurance.

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By Kfir Cohen

Kfir Cohen is handling global operations, cargo shipping, negotiation, and management of different suppliers around the world. He has more than 15 years of experience in the avant-garde of relocation and the sea/air freight business.
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