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Understanding The Ins And Outs Of Marine Insurance

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Understanding The Ins And Outs Of Marine Insurance
Understanding The Ins And Outs Of Marine Insurance

Planning to travel abroad and take your car with you? Marine shipping is a good and popular method to transport your automobile. Most of the time, your vehicle will be shipped smoothly and delivered in the same condition as at the time of drop-off. Occasionally, however, accidents do occur in transit which may cause damage to your car. If a dented or lost car is not insured, it is highly unlikely to establish the liable party and obtain repayment for the auto shipping costs. For that reason, acquiring marine insurance prior to shipment, while not always legally necessary, would be a wise decision. 

Car Shipping Methods

Choosing a shipping method is an important first step. Shipping vehicles via air freight is safe and fast but costs a fortune, which is worthwhile if you own a vintage, fragile, or exceptionally valuable automobile. Transporting cars on a ship is a great alternative. There are two methods for marine auto shipment: Roll on, Roll off (RORO) and containerized shipping.

  • Roll On, Roll Off (RORO). Vehicles are driven onto a ship, inside of which the workers secure automobiles tautly to their decks with the help of specialized fixing devices such as ratchet tie-down straps and clasps. RORO is an economical shipping method but, when it comes to safety, exposure to the mercy of weather and other external elements does not guarantee the peace of mind.
  • Containerized Shipping. The most common way to ship automobiles is in a shipping container. This method costs more than Roll On, Roll Off but provides greater protection throughout the entire journey. For extra security, you can transport your car in a sole 20-feet container. To cut the transportation costs, you can opt for a shared 40-feet container, which can fit up to six cars.
Shipping Containers

What are the Risks Involved?

When shipping vehicles overseas, one should always account for the risk, however slight, of damage in transit. Depending on the type of shipping, automobiles are susceptible to inclement weather, strong waves, flooding, fire, and theft, among other risks. Sometimes, vehicles may not be properly secured in their decks and containers ensuing damage to other carriages. Maritime personnel’s standard is to lash each car so tightly that the vehicles barely budge but even a slightly loosened hook or strap can cause a car to ricochet around and damage thousands of other vehicles in the deck It only makes sense then, to insure and protect your auto.

A trustworthy and experienced insurance company will provide specialized insurance policy against various types of damage while on transit, such as: 

  • Fires
  • Breakages
  • Dents and chipping of paint
  • Loss

Though the potential risks are slim, it is important to be safe rather than sorry in the event of an accident. Reputable companies can help facilitate a straightforward and quick procedure. There are typically two kinds of coverage, which are discussed further in the next section.

Types of Marine Insurance Coverage

There are two types of marine insurance: Total Loss and All Risk. Like with any common insurance, the better the coverage, the higher the premium. Let’s take a closer look at both kinds.

  • All Risk. This type of policy covers all types of damages. This is why All Risk insurance applies only if the vehicles are packed by professional personnel. Depending on the policy, All Risk insurance commonly goes into effect from the day of loading, through transit and delivery, and up to the 45th day upon arrival at the final destination. This type of marine insurance guarantees to repair or replace any damaged articles or provide cash in the amount of the current market value of the car.
  • Total Loss. This kind of insurance policy incorporates fire, theft, and complete loss of shipment only. A total value is required to be placed on the shipments. In the event any of these incidents happen, the insurance company will replace your vehicle with another one or provide a cash settlement in the amount of the total value of your automobile.

It is highly advisable to contact and speak to your insurance agent for further details regarding types of coverage and your vehicle. The percentage rate will be determined by the deductible you pick. Ask a sales representative to explain all options. In addition, be sure to set up your policy before departing the country so you and your vehicle are covered throughout the entire trip.

A Few Things to Know Beforehand

Once you find a reliable shipping company that is licensed with the Federal Maritime Commission, set up all your shipping arrangements and are ready to purchase insurance, consider checking off these eight procedures:

  • Choose your coverage carefully. If you are transporting your vehicle overseas, especially to farther continents, better coverage for expanded protection is the best assurance against potential risks. You may want to contemplate picking the policy that also covers any damages that can occur in the process of loading and off-loading vehicles from containers and ships. 
  • Talk to your insurance provider. Reaching out and talking to your insurance agent may provide you with the necessary information, a better understanding of your coverage, and valuable advice. It is highly recommended to contact a representative before purchasing insurance. Bear in mind that should you plan to drive your car abroad, you will need to acquire an international insurance coverage in addition to the shipping policy. An agent will be able to provide it to you or point in the right direction.
  • Shop for quotes. Take your time and request quotes from several insurance companies. The rates can vary from one provider to another with a price difference ranging between 1.5 to 3 percent of your automobile’s value. 
  • Obtain and read the insurance policy thoroughly. If you have any questions or need clarifications, do not hesitate to reach out to your insurance provider and address them. Clear understanding of the policy and all clauses in it is the best way to protect yourself and the vehicle. As a general rule, avoid purchasing insurance coverage from providers who do not share their policies with you upon request. 
  • Be sure to notify the DMV before shipping your car abroad. Depending on the nature and duration of your trip, some state guidelines have specific mandates regarding the removal and retaining of license plates.
  • Remove all items for the interior of your car. This is a crucial step in preparing a vehicle for shipment. This includes CDs, electronics, change, and even air fresheners. In addition to adding weight, any items left may be tossed around during transit causing damage to the inside of the car. Furthermore, belongings left inside may themselves be damaged or lost during shipment without the possibility of recovery. Most auto shippers will not cover damage to the interior as well as break-in theft, so removing all loose items before submitting your automobile can reduce such risks. 
  • Bill of Lading. Once your car reaches the destination, you will be asked to fill out the Bill of Lading, which is a condition report detailing the state of your automobile upon delivery. Be sure to inspect the car thoroughly, including the undercarriage, and to start the engine. Any spotted signs of damage should be included in the document and signed by both parties in order to proceed with inquiries about reimbursement. That is because signing the Bill of Lading amounts to the completion of the transfer and releases any liability from the shipping carrier.
  • Take photos. It is highly recommended to take photos of your vehicle prior to handing it off for shipment as well as upon delivery to the destination port. Take several overall and detailed pictures of both the exterior and the interior. Be sure to take clear, zoomed in images of any dents and other damages. Photos will serve as useful proof in case you need to file a claim.

Summary 

The chances of accidents may be very slim but they still exist and unforeseen events do happen. While marine transportation of automobiles is a safe method, purchasing an insurance policy is essential to ensuring a smooth procedure and gaining a peace of mind. Knowing that you and your vehicle are fully protected is priceless.

Joe Webster
Written By:Joe Webster
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Joe Webster began his journey in the auto transport field by attending the University of Southern California (USC), where he graduated with a Bachelor of Business Marketing. 

After college, he started his career in the auto transport industry from the bottom up and has done virtually every job there is to do at A-1 Auto Transport, including but not limited to: Truck Driver, Dispatch, Sales, PR, Bookkeeping, Transport Planner, Transport Manager, International Transport Manager, Brokering, Customer Service, and Marketing. Working with his mentor Tony Taylor, Joe Webster has learned the ins and outs of this industry which is largely misunderstood. 

With over 30 years experience in the industry, we've been helping people ship their vehicles, motorcycles, RV's, heavy equipment, household goods and more across the country or overseas without a hitch. Ask us anything.

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