Meaning, types of marine insurance
Want to know various types of marine insurance? Here you can know the meaning of marine insurance and its different types.
Marine insurance definition
Marine insurance covers the loss to the ship or cargo during water transportation. The loss can either be a complete loss or partial loss or damage. It also includes any loss incurred on the point of origin or destination, during loading or unloading or material.
There are different types of marine insurance policies which vary according to the terms, needs and demands of the insured material and their owner (or transporter). Marine insurance types
Following are the types of cover in it:
- Time based policy: It is taken for a definite period of time which is usually of one year or less than one year.
- Voyage policy: It covers a specific voyage from one place to another.
- Mixed policy: It is a combination of time policy and voyage policy. Thus it covers risks of a specific voyage for a definite period of time.
- Port risk policy: It covers the risks to ship when it is standing at the port.
- Open or unvalued policy: Any value of cargo or ship is not mentioned beforehand on policy. It is reimbursed after any loss occurs to the cargo or consignment after the assessment of loss.
- Valued policy: It is reciprocal of unvalued policy. Value of cargo and consignment is mentioned beforehand while taking policy and is mentioned in it. This makes clear to both the parties that maximum how much amount will be reimbursed by insurer in case of any loss.
- Floating policy: It is taken under the conditions when it is really impossible to estimate the accurate insurable amount of goods and thus to compute premium ought to be paid on it. It is mostly suitable for regular suppliers who deal with huge valued goods. The trader takes the policy of a lump sum amount which can cover all his shipments for a period usually not exceeding 12 months. At the dispatch of every shipment, insurer company is informed and value of that shipment is deducted from policy (lump sum amount). When such lump sum exhausts or is about to extinguish, then premium is calculated according to the shipments dispatched and make necessary adjustments. At this point, trader takes another floating policy and the whole process goes into circle again.
- Wager policy: It is not in written documents and has no validity in court of law. Even the terms of reimbursement are not mentioned in this policy. In case of any loss, insurer inspects the loss and then decides that whether such damage is worth any reimbursement or not.