In InsuranceSamadhan.com’s A-Z Blog series on Insurance topics, we try to provide all vital information related to the Insurance sector and demystify certain myths related to the sector. In today’s blog, we are sharing detailed information regarding – Marine Insurance – and everything that one needs to know.
Though the word Marine Insurance confuse everyone but it means insurance of all goods which are in transit. This transit can be by road, by ship, by air from one place to other.
Traditionally Insurance was conceived by traders who use to transport material through sea route by ship from one country to other. Sea transportation was quite risky and transporters adopted a system of pooling funds to help those whose goods in transit are lost. That is why such insurance is called Marine Insurance.
What is Marine Insurance?
Marine Insurance Meaning
Marine Insurance covers comprehensive risks and also offers additional risks under extra premium. Perils covered include Fire, accident, collision, sinking, damage in shipment, loss due to burglary, damage due to loading –unloading.
Marine Insurance safeguards business interest of all who are sending their stock from one place to other. Exporters, manufacturers, farmers should send goods under Marine Insurance. Today, all general insurance companies offer Marine Insurance which protect financial interest of all involved as given below:
Features of Marine Insurance:
- Buyer if goods are bought under FOB (Free on board system) which means seller is responsible till the place of loading. Once the stock is loaded, it become property of buyer and buyer will be at loss if there is any problem in transit.
- Seller if goods are transported under CIF i.e Cost include insurance and freight.
- Banker if the goods in transit are financed by bank under letter of credit.
Reasons Why Marine Insurance Claims Get Rejected:
Marine Insurance also have many exclusions which causes claim rejections. These exclusions are given below:
- Poor packaging is considered self induced. Many claim rejections take place because Insurance Company surveyors find faults in packaging. Hence follow standard protocol of packaging as authorised by Indian standards.
- Vehicle maintenance – claim is rejected if it is proved that vehicle was not maintained and was carrying material over its allowed capacity.
- Wilful misconduct – claim is also rejected if wilful misconduct is found.
- Excessive delays –Insurers can attribute loss to excessive delays which might have happened in taking extra route, load mixing and other such reasons.
- Riots or war like situations
- Loss in perishable goods or loss in weight – unless specific information has been included in insurance contract.
- Inadequate Insurance Policy and documentation.
Marine Insurance also follows general principle of Insurance as given below:
Principles of Marine Insurance:
- Indemnity i.e Insurer promises to compensate the loss only.
- Insurable Interest i.e Insurer must have an obvious reason that how the loss impacts the insurer.
- Utmost good faith – Insurer undertakes the promise of compensation in good faith believing that declared goods has been shipped.
- Proximate Cause – Insurer would verify the proximate cause of loss and consider claim settlement.
- Subrogation – Insurer has the right to minimise its loss by making third party damage claim.
Marine Insurance precautions for easy claim settlement:
To ensure smooth claim settlement, Insurance Samadhan recommends following precautions:
- Maintain records of all stocks in transit by including it in open policy. Invoice, particulars of stock in transit, road permits should be in order.
- Ensure right vehicle is used. Make an agreement with transporter on Vehicle fitness certificate.
- Maintenance of records at warehouse.
- Police FIR, Panchnama should be prepared and Insurer should be informed in writing at an earliest date.
It is a very wide subject and need expert guidance. Insurance Samadhan has team of experts to guide you in selecting right Marine Insurance and in claim management. We also have a legal team to fight your case if you feel that your claim has been rejected.
If you are facing any difficulty regarding Marine Insurance you can contact us at InsuranceSamadhan.com. We have helped resolve over 12,600 customer grievance cases in the past related to all types of Insurances, ULIPs and other financial products.
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