Different Types of Marine Losses And Their Impact
Marine insurance refers to a type of insurance plan that provides coverage for the damages done to the insured goods during marine transportation. There can be different kinds of marine losses and depending on it, you will have to choose adequate coverage. So, if you have a marine insurance Plan, you need to know about the type of marine losses. Read on to know more.
Different Types of Marine Losses
Listed below are the different types of marine losses that you should be aware of:
1. Total Losses
Total loss is one of the first kinds of losses in marine insurance plans. As the name suggests, Total Losses provides coverage if there is complete damage to the insured property. Even if the property has not been damaged completely, coverage is still offered in case the insured goods cannot be retrieved. Total Loss is further classified into Actual Total Loss and Constructive Total Loss.
Actual Total Loss is when the insured good cannot be recovered in any possible way. Thus, in a situation where the goods are irreparable, they will fall under the category of Actual Total Loss. Some of the instances of Actual Total Loss are as follows:
- When a storm or fire outbreak causes damage to the goods
- If a pirate or any potential enemy attacks the ship and steals the goods from the ship
- In case the ship loses the route and goes missing for a long period and no concerned authority is informed about the same
Thus, when Actual Loss occurs, the insured business is liable to get complete coverage against the total loss incurred. The insurance company will settle the claim and pay back the total loss.
Constructive Total Loss is when the insured good is damaged in a way that the repair cost that goes towards the lost good is more than the total value. It arises in the following cases:
- The insured good is damaged but not to an extent where it cannot be restored. In this case, however, the total expenses will exceed the total value
- If the cargo transporting the goods gets stranded on a remote island and you need to retrieve your goods
- In a war zone when the ship can still be escaped
In Constructive Total Loss, you can either abandon the damaged good or get the total value paid back.
2. Partial Loss
As the name suggests, Partial Loss is a type of loss when the insured good is only partially damaged. There are two types of Partial Loss Partial Average Loss and General Average Loss.
Partial Average Loss is a type of loss in which only one party is affected. Let us understand this with an example, if your good is damaged due to mechanical failure, then the insurance company will provide financial compensation based on the difference between the property’s value before and after the loss.
General Average Loss on the other hand is when the cargo personnel damage the goods to ensure the safety of the cargo. For instance, there may be a situation when a certain weight of goods will have to be dumped to prevent the ship from sinking.
Take Away
So, now that you know about the different types of marine losses, it will become easier to raise a claim against it. You can also explore several marine insurance plans on the InsuranceDekho website.
FAQs about Kinds of Losses in Marine Insurance
Q. What are the different types of marine losses?
A. There are two types of marine losses, Total Loss and Partial Loss.
Q. Can I buy marine insurance with InsuranceDekho?
A. Yes, you can buy a marine insurance plan with InsuranceDekho.
Q. Will I get coverage for the total loss under Marine Insurance?
A. In case the insured good is completely damaged during the shipment, then complete financial coverage will be offered under Marine Insurance.
