Why Your Loss Didn't Get Fully Compensated from Cargo Insurance
When Full Compensation Is Provided
Generally, if goods are lost, destroyed, or sunk during shipping, you can expect to receive 100% compensation because the goods haven’t been delivered yet. However, the most challenging situation for a cargo insurance claim arises when the goods are damaged.
Compensation for Damaged Goods
In most cases, insurance companies provide compensation based on the degree of damage. If the goods are still usable, full compensation may not be provided. Using a cbm freight calculator can help estimate cargo volume and shipping costs, ensuring proper insurance coverage.
For example, consider a chipped ceramic plate where the damage is limited to the edge. Insurance might consider the plate usable and offer compensation less than the actual value of the item.
For example, consider a chipped ceramic plate where the damage is limited to the edge. Insurance might consider the plate usable and offer compensation less than the actual value of the item.
To minimize potential losses and ensure efficient cargo planning, tools like a container loading calculator can help businesses optimize space utilization while factoring in potential risks and insurance considerations.
On the other hand, if the damage is severe, making the item irreparable and unusable, you are more likely to receive full compensation.
If a shipment is partially damaged but still deliverable, the insurance may only cover the affected portion. A less than container load calculator can help businesses determine shipment value for insurance claims.
Other Factors That May Limit Compensation
There are two common scenarios where even with total loss, full compensation may not be received:
- Poor Packaging: If the packaging is inadequate, such as weak external materials or insufficient internal cushioning, the insurance company may reduce or deny the claim. Proper packing is crucial to avoid disputes.
- Claims Limit: Insurance companies may impose a maximum claims limit based on the insurant's business scale, past claims frequency, and their profitability from the insurant. Unfortunately, the exact limit is often undisclosed. For example, if α Insurance Company sets a yearly claims limit of $1 million for Insurant A, and A has already claimed $800,000 that year, any subsequent claim exceeding $200,000 will not be fully compensated. Additionally, the insurer might delay or reject the claim using other excuses.
- Additionally, certain types of shipments, such as those transported via roro ocean carriers, may have unique insurance policies due to the higher risk factors associated with vehicle transport. These policies may include different claim conditions, potential exclusions, or limited compensation coverage, making it essential to review terms carefully before shipping.
It's important to note that insurance policies vary, and specific terms and conditions apply. Understanding these factors can help you manage risks and ensure proper compensation for losses or damages.
At CargoesPi, we specialize in helping businesses navigate cargo insurance complexities. Whether you need guidance on policy coverage or optimizing your shipments, our team is here to assist. Contact us today to ensure your cargo is well-protected.