Marine insurance is a vital shield that offers protection to maritime businesses under its umbrella. It protects marine businessmen from loss of cargo and other assets. To provide protection from losses, insurers charge a premium from the insured, which is the cost of marine insurance
The premiums for buying marine insurance online and offline have changed drastically over the years due to the increase in demand, inflation and other factors. Let us understand the factors that affect marine insurance premium rates.
Factors Affecting Marine Insurance Premiums
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Type of Cargo – The type of goods or cargo that you insure determines the premium for transit insurance online. Goods such as perishable items, chemicals, and high-value items like electronics have a higher premium as there are higher chances of damage and theft. On the contrary, durable and bulky items have a lower premium as their chances of survival are higher.
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Voyage Route – The shipping route of the cargo or vessel also affects the premiums of transit insurance online. For instance, if the ship is en route to its destination via piracy-prone areas, you may have to pay higher premiums.
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Insurance Coverage – When you choose high-coverage policies or opt for add-ons in your insurance coverage, the premiums are bound to increase. On the other hand, if you only purchase a basic marine policy, the premium may be lower.
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Vessel Type and Condition – The type of vessel, its age and present condition decide whether your premium will be high or low. New vessels that are equipped with the latest technologies and safety devices usually have lower insurance premiums compared to old and outdated vessels.
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Loss History – Insurance companies charge premiums after considering the claim history of the vessel or the insured. If the vessel has been involved in accidents previously or if the insured has made claims about his cargo in the past, the premiums may be higher.
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Underwriting and Assessment – Insurers may also appoint underwriters to evaluate the risk associated with the particular insurance coverage. It helps them find out the exact risk involved, helping them charge an appropriate premium for risk coverage.
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Policy Terms – Every insurance policy comes with its terms and conditions, which lay the foundation for the premium. It includes the inclusions, exclusions, exact coverage, etc., which determine the premium amount. A policy that offers total loss coverage charges a higher premium than one that offers partial or selected coverage.
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Deductibles – The deductibles in insurance can affect the premium rates substantially. If you opt for higher deductibles, your out-of-pocket expenses increase. Thus, you pay a lower premium, as the insurer’s risk is reduced. On the contrary, if you opt for lower deductibles, the insurer’s risk is high and the premium charged will also be higher.
How to Pick the Best Marine Insurance?
Keep the following factors in mind to purchase the best marine insurance.
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Assess the coverage limits and exclusions to understand what is included and what is not. Opt for a plan that offers comprehensive coverage for your cargo/vessel.
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Find out the claim settlement ratio and the claim settlement process of the insurer. It is wise to choose an insurer that has a high CSR and offers simple claim settlement processes.
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Compare the premium against the coverage to ensure that you pay a fair price for the insurance. A higher premium is worth it if the insurance coverage is extensive and meets your requirements.
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Watch out for the deductibles and co-payment options as well. A higher deductible may lead to lower premiums, but it will increase your out-of-pocket expenses. Thus, opt for a deductible amount that matches your budget.
TATA AIG Marine Insurance: Aiding you with the Best Coverage
Factors such as shipping route, nature of the goods, deductibles, risk assessment, etc., are vital while determining the premium of your marine insurance policy. It is wise to opt for a policy that offers affordable premiums with comprehensive coverage so you can get maximum protection.
TATA AIG is one such insurance company that provides comprehensive marine insurance plans at affordable rates. While you get maximum coverage, you are saved from spending huge amounts on the premium.
Besides, you can also get customised marine plans to suit your business needs. Their marine insurance claim processes are also simple and quick, saving you from unnecessary hassles. From hull and machinery to cargo and liability to freight insurance, you can rely on them for all your marine coverage needs.