Increased Value Clause in Marine Inland Transit Insurance

Traditional marine insurance policies estimate the cost of coverage on the basis of the market value. It means if a vessel is destroyed, the insured shall be entitled to receive the market value of the ship. However, there are several other expenses that are required to be met by the ship's owner. For example, the insured is expected to bear the sundries cost and office expenses in order to replace the ship with a new one. Therefore, the insurer is required to understand the need for increased value in marine inland transit insurance.

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Increased Value in Marine Inland Transit Insurance

Insurance companies are dynamic. They bring changes to harmonize with the requirement of their customer. To eradicate the issue of the additional cost associated with the new ship, the insurance company recognized the essence of increased value in marine inland transit insurance.

The increased value in marine inland transit insurance offers additional cover to the ship owner. It provides 20% to 25% additional cover of the total loss incurred by the insured. Therefore, the additional value shall be in excess of the market value of the vessels.

Benefits of Increased Value in Marine Inland Transit Insurance

Let us discuss some benefits of the increased value clause in marine transit insurance.

  1. Indemnification

    The policy indemnifies the insured against a loss or damage suffered by the vessel. In addition, it offers increased value to the insured to deal with other costs associated with a new vessel.

  2. Statutory Authority

    The increased value of the insurance must be established by the statutory body. The appropriate government shall be liable to determine the additional proportion or percentage to be offered to the insured.

  3. Eligibility

    The increased value shall only be subject to the policy if the insured owns a cargo insurance policy.

  4. Issuance

    The increased value shall be issued along with the cargo insurance policy. Therefore, if the insured wishes to avail of increased value, he must subscribe to the cargo insurance policy.

  5. Term and Conditions

    The terms of the increased value shall be applicable as per the cargo insurance policy.

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Case Study

Let us discuss a case study on the increased value in marine transit insurance.

  • Since 1994, ABC enterprise is known for exporting electronic items from one nation to another. 60 per cent of the total export of ABC enterprises takes place via sea or waterways. Therefore, the company owns a ship in order to transport or export the goods.
  • In 2022, the ABC enterprise was offered a contract to transport electronic items from Mumbai to Singapore. The ABC enterprises accepted the offer and loaded the goods for transportation. Due to a short circuit, the electronic items caught fire, which caused the devastation of the ship, and the electronic items.
  • The ABC enterprise had a marine inland transit insurance policy. The company contacted the insurance company in order to settle the claim. The insurer appointed a surveyor to conclude the value of the loss.
  • The insurance company settled the claim by providing the value of the ship. However, the ABC enterprise had to incur more costs associated with the new vessel. There was no increased value clause mentioned in the insurance contract. Hence, the enterprise could not claim an additional value of the ship.
  • At the same time, XYZ enterprise also suffered a huge loss due to the fire. The ship caught fire which resulted in its devastation. The enterprise approached the insurance company. The surveyor was appointed who estimated the loss and damages caused to the ship. Further, the XYZ enterprise has an increased value in marine inland transit insurance policy. Hence, the company claimed the additional amount. The insurance company settled the claim by providing the total loss along with a 25% additional value of the insured vessel.

Conclusion

The traditional marine insurance policy offers the market value of the ship. However, it does not fall under the interest of the ship owner or insured. Therefore, the insurance companies realized the need for the addition of increased value in marine inland transit insurance policies. The increased value indemnifies the insured against the additional costs associated with the ship.

Written By: PolicyBazaar - Updated: 27 April 2023

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Policybazaar for Business - Marine Insurance - Customer Reviews
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4.3/5
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4.3
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Based on 114 reviews
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3.8 April 20, 2023
Anas
Great Experience
I recently purchased Marine insurance from Policybazaar for my shipping business and I must say I am thoroughly impressed with their service and coverage. From start to finish, the experience has been smooth and hassle-free.Thankyou.
Mizoram
4.3 April 03, 2023
Vaishnav
Provides Comprehensive Protection
When it comes to coverage, Marine insurance that i bought from PolicyBazaar has exceeded my expectations. It provides comprehensive protection for my cargo and vessels during transit, ensuring I can focus on my business operations with peace of mind. Thankyou.
Assam
4.3 March 17, 2023
Umang
Excellent Services
I highly recommend Marine insurance from PolicyBazaar website to anyone in the shipping or logistics industry. Their user-friendly website, comprehensive coverage, and excellent customer service make them stand out from the competition. With Policybazaar, I feel confident in navigating the high seas, knowing that my business is well-protected. Thank you, Policybazaar.
Chennai
4.3 February 28, 2023
Vishal
User Friendly Interface
The website's user-friendly interface made it easy to compare different plans and find the perfect fit for my business needs.Thanks
Gurugram
4.3 February 11, 2023
Parth
Prompt Services
I appreciate the transparency and honesty with which Policybazaar handled my claims. They were prompt in processing my claim and their claim settlement process was hassle-free.Thanks PolicyBazaar.
Noida
3.8 February 10, 2023
Rishabh
Exceeds Expectations
I recently had the pleasure of purchsing marine insurance from Policy bazaar website and I must say it has been an outstnding experience from start to finish. I am thrilled to share my positive customer review, as this truly exceeded my expectations. Thanks PB.
Jamshedpur
3.8 January 31, 2023
Arvind
Easy Navigation
The ease of navigating the Policy bazaar website and finding the right marine insurance policy was impressive. The website's user-friendly interface and intuitive design made it incredibly simple to compare various options, understand the coverage details and make an informed decision. I appreciated the transparency provided throughout the process. Thanks.
Ajmer
3.8 January 21, 2023
Vishal
Excellent Support
The customer service provided by Policy bazaar was decent. Their team was responsive, knowledgeable and went above and beyond to assist me at every step. Their professionalism and commitment to customer satisfaction were truly commendable.Thankyou.
Mumbai
4.3 January 11, 2023
Sanjeev Rathor
Efficient Process
When it came to claims processing, Policy bazaar demonstrated remarkable eficiency and effectivenes. I had an unfortunate incident during the coverage period and filing a claim was a breeze. The entire process was streamlined and their team guided me throuugh every necssary step, making it hassle-free. The promptness with which my claim was setled reflected their commitment to their customers' well-being and peace of mind. Thankyou.
Pune
3.8 January 01, 2023
Kunal
Comprehensive Coverage
I must mention the comprehensive coverage provided by the marine insurance policy I purchasd through Policy bazaar. It offered me the necesary protection and peace of mind. Thankyou PolicyBazaar.
Indore