This is why considering international shipping insurance might be a good idea. Picking the right container shipping insurance is more complex than choosing travel insurance. At International Van Lines, we’ll explain the different options.
Cost of international shipping insurance
While the prices for container insurance are different, most likely, it will be approximately 0.15% of the costs of goods. The value of the goods given on the invoice will be the total value of the purchased goods in dollars. Here’s how to calculate the cost of container insurance:
The value of your order: $1,500
Sea transport: 0.15% of the value of the goods
Insurance cost: 1500 x 0.15% = $2.25
The final cost of insurance: $225
Of course, costs such as the type of container and other factors will affect the final insurance cost. What will be covered by insurance will also impact the cost as not all types of container insurance cover things like natural disasters and accidents.
Read more: The Challenges of Moving Overseas.
Is shipping insurance worth getting?
Since you are shipping household items, shipping insurance might be worth it. Even though the chances of your items getting lost or damaged are very small, insurance will pay for casualties. Shipping a container is safe. Between 2010 and 2020, 40 containers were lost, but in the past year, only one was lost. Insurance covers damage during shipment.
Having insurance is not only for potential loss or damage; it can also remove the stress of having your items delivered broken or not showing up at the destination. This type of insurance protects you against theft, damage, and more. Depending on the insurance you pick, you can have any losses reimbursed.
Benefits of having international shipping insurance
Even the best-known shipping companies sometimes fail. Having insurance means you’ll be reimbursed for any delayed shipments and any damage that happens to your items. Here are three main benefits of shipping insurance:
- Added assurance: Knowing that your deliveries are covered is a big relief with many other moving overseas concerns. Should your shipment have trouble, you don’t have to worry about additional costs.
- Protection against incidents: The right insurance not only protects your transported goods but also against any costs that may arise in the so-called common breakdowns. Things like a pirate attack or fires can delay your cargo and increase prices, but having this type of insurance will account for these costs.
- Protect your goods: Insurance can cover any damage that happens to your items during loading or unloading, as well as in transit.
Read more: How to Move Valuables Safely and Securely.
Understanding international shipping insurance
This service is a product offered by carriers to cover a specific shipment, in this case, your cargo. It protects it against any damage to the items, if someone stole the goods, or if something was lost during the shipment. To get total reimbursement, you will need to declare the full value of the items you are shipping for the cost to be credited back to you or the buyer.
What does insurance cover?
Cargo insurance protects you from financial loss due to damage or lost cargo. The amount it covers depends on what happens to your freight and the price you pay for insurance. It pays for covered events such as natural disasters, cargo abandonment, piracy, customs rejections, and vehicle accidents.
However, cargo insurance doesn’t cover most risks and situations that you have much control over. For example:
- Damage due to inadequate packaging
- Damage due to flawed products
- Specific kinds of freights
- Some modes of transportation
Types of cargo insurance
All cargos should have minimum insurance, which is called carrier liability. But there are a few types of cargo insurance you can take on top of this to ensure your shipment will arrive with no problem. There are very different types of cargo insurance you can choose from; these are the most common ones.
Most marine freight shipping companies will include this basic requirement.
Land cargo insurance
This covers cargo moved by land transportation, including trucks and small utility vehicles. Land cargo insurance covers theft, collision damages, and other common risks involved with freight shipping. This is very common for domestic cargo and long-distance cargo, for example, if you’re moving from the US to Mexico and choose land cargo instead of sea freight.
Marine cargo insurance
Despite its name, marine cargo insurance covers ocean and air freight. It’s mainly used for international shipping and covers everything from loading/unloading, weather conditions, piracies, and risks faced by airplanes or ships.
With marine cargo insurance, you can choose from several types, including:
- Open coverage: This covers your freight for a specific period, usually about a year. This is ideal for container shipments that often take anywhere between 8 to 11 weeks to arrive and often more. Some shipping companies might include this within their costs.
- Specific Cargo Policies (SCP): This covers freight on a per shipment basis, which is why it’s the most commonly used for overseas moves.
This type of cargo insurance covers most causes of lost or damaged shipments, providing that the goods are new and not prone to spoiling or damage. However, this doesn’t cover damage due to natural disasters, loss or damage due to war, and negligence of the importer/exporter.
Free from particular average
This type of insurance covers all significant damage or loss due to stranding, sinking, or collision. In this case, the insurance policy will cover what other types of insurance don’t, such as bad weather conditions, theft, non-delivery cargo, and collisions.
Warehouse to warehouse
Don’t forget to include this insurance when you secure your cargo. You should also consider warehouse to warehouse insurance if you need storage.
When planning an international move, you need to consider getting cargo insurance for your items. Insurance can help save you from a major headache. The team at International Van Lines would be happy to walk you through the process.