2 cargo insurance traps every shipper must know (even if you ship cargo with NO insurance)

Shippers: in this article we will cover topics that will blow your mind and change your perspective on cargo claims for 180 degrees!

Let’s dive in.

Scenario #1:

I AM BUYING CARGO INSURANCE EVERY TIME

Marine cargo insurance offers different types of coverage and different deductibles.?

One way to LOWER your premium is to agree to a HIGHER deductible so you take on more initial liability and the insurer takes on less. Another way is to eliminate optional coverage lines that you might not need.

For example, if you store your goods in an insured warehouse, you might not need storage coverage with your marine policy. Or?you may have a $1,000 deductible, but claims due to theft may come with a $5,000 deductible.

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All of these affect the cost of the monthly premiums you will pay. In general, the higher the deductibles and the more exclusions, the lower the premiums. The tradeoff, of course, is that if you have a claim, you will pay more out-of-pocket.?

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What is the biggest misconception?

That you cannot pursue cargo claims BELOW the DEDUCTIBLE.

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No one knows (or pays attention) to the insurance DEDUCTIBLES which, in the case of marine insurance, are very high. That loss goes back to the cargo owners and freight forwarders, especially for small cargo value shipments, where the cargo owners gets nothing.

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Even when cargo owners are not at fault, they end up ABSORBING losses for cargo damages. Due to the competitive market, freight forwarders also incur LOSSES in order to maintain good relationships with their customers.

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The weakest party in the line gets the whole blame. And the weakest link in the chain is cargo owners and freight forwarders.

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The good news is that you CAN and you SHOULD purse claims even if they are below the deductible. This is the biggest trap exporters and importers fall into when thinking that it is not worth to pursue cargo claims for compensation if cargo is insured.?Or even worse, to absorb all the losses out of the pocket.?

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????Advice:

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Check your numbers and see if it is financially worth to seek for compensation despite insurance policy, deductible amount or scope of coverage.?If it is: file your cargo claim!

Remember: even when your deductible is HIGH, you can still file your claims for cargo damages/losses BELOW THE DEDUCTIBLE. Nobody can stop you from filing the claim. Small or big damage = a loss is a loss.

?Scenario #2:

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I NEVER BUY CARGO INSURANCE FOR MY CARGO

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This is the category that majority of the shippers fall into, especially those shipping low cargo value.

But this is what you might not know.

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If you are a shipper that transports goods without insurance, you still HAVE certain rights that protect their cargo. These rights are often outlined in a contract of carriage, which establishes the terms and conditions of the shipment between the shipper and the carrier (shipping line).

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The carrier has a duty of care to transport the goods safely and securely, and to deliver them in the SAME CONDITION as when they were loaded onto the vessel.

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So, if the cargo is damaged or lost during transit, the shipper will be able to file a claim against the carrier for compensation as the shipping line is liable for cargo damages even if there is NO insurance in place because the carrier IS responsible for the safe transport of the cargo, regardless of whether the shipper has arranged insurance coverage.

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????Advice:

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Whoever damaged your cargo, have to be the part to pay for it. Not insurance, not you, but the liable party!?It is totally fine to claim compensation from the liable party so START doing it today .

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Don't let the power held by shipping lines intimidate you into accepting being the weak link.

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Use the advice given above to overcome your weaknesses and claim what's rightfully yours - the power has always been in your hands, waiting for you to realize and utilize it!

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About us:

Recoupex ?is a technology company helping customers globally to obtain the compensation they are entitled to when cargo is lost or damaged in transit . In addition, we actively support exporters to collect outstanding invoices from their negligent overseas partners.

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