What is Marine Insurance Calculator and How to Calculate It?

Do you know marine insurance covers not just ships but also includes air, rail, and road transport? This type of insurance protects cargo from the factory gate to the customer’s doorstep.

If you are an MSME looking for commercial insurance to protect your goods when in transit, explore marine insurance policies from Bajaj General Insurance. Also, understand what is a marine insurance calculator and what are factors that determine the premium amount.

What is a Marine Insurance Calculator?

When shipowners and businesses transport goods, they purchase a marine insurance policy to protect their goods and ship from the risks involved in transporting goods from one place to another. While purchasing the policy, they need to pay a premium to insurance companies, which promise to compensate the insured in case of losses.

A marine insurance calculator is a tool that helps in calculating this premium in seconds. Businesses need not visit the office of the insurance company to understand the cost. It can be estimated in a matter of seconds for marine policies.

This tool is helpful for MSMEs, exporters, importers, logistics providers, and e-commerce businesses.

Understanding the Benefits of Using a Marine Insurance Calculator:

●        It helps to estimate the premium costs in seconds.

●        Knowing the cost beforehand helps businesses plan their logistics budget better.

●        Businesses are aware of the coverage levels.

●        They also know what is covered and what additional cost needs to be incurred for opting for add-ons.

Why Businesses Should Use a Marine Insurance Calculator?

A marine insurance calculator offers various benefits; Indian MSMEs and enterprises involved in marine trade need to explore this tool.

●       Helps in Budgeting: You need not guess the amount of insurance premium you need to pay as the tool provides estimations before you purchase the policy.

●       Provides a Transparent View: You can view how each factor affects your total premium and it helps to have a transparent view of the costs without any hidden element.

●       Time-Saving: There is no need to visit the insurer’s office physically or consult the agent. You can get the estimate within seconds.

●       Helps in Decision-Making: Businesses can adjust the coverage and see its impact on the premium. It helps in taking accurate decisions based on your needs.

●       Better Financial Planning: Knowing your marine insurance costs in advance helps in planning and pricing decisions as you need to deal with overseas clients or vendors.

How to Calculate Marine Insurance Premium?

To calculate the marine insurance premium, the process is simple. You need to input some basic details and the tool generates the premium instantly:

1. Find Out The Value Of The Consignment

The CIF (Cost, Insurance, Freight) includes the cost of goods, freight charges, and a buffer or markup to cover any incidental expenses. The total is the insured value, which is the base for calculating the premium.

Example:
If the cost of goods is ₹5,00,000 and freight is ₹50,000, then:

Sum insured = ₹5,00,000 + ₹50,000 + 10% of (₹5,00,000 + ₹50,000) = ₹6,05,000

2. Input The Type Of Cargo Being Transported

You need to mention the type of cargo that you are transporting. There is a greater risk in transporting perishable or fragile goods as compared to bulk commodities. So such heavy risk goods will attract higher premiums as compared to lower risk goods.

3. Transit Route And Distance

The area where your shipment will be delivered also influences the premium. Distance also matters; long distances will attract higher premiums. If the journey involves piracy or conflict zones or rough weather areas, a higher premium will be charged.

4. Mode Of Transportation Involved

Goods can be transported through the sea, air, or land. The premium is different for different routes because of the difference in the risk involved. Sea transport is more affordable as compared to air transport due to speed and risk. Premium for rail or road transport varies depending on the prevailing conditions.

5. Levels Of Marine Insurance Coverage

Three levels of marine insurance coverage offer different extents of protection.

●        Institute Cargo Clause A (All Risk): It protects the cargo from all risks during transit barring a few exclusions. It is the most expensive but provides the most comprehensive protection.

●        Institute Cargo Clause B: This level provides moderate coverage and provides protection against a specific list of perils.

●        Institute Cargo Clause C (Basic Cover): The basic cover provides limited protection against a narrow set of named perils.

6. Duration Of The Policy

Insurance companies provide discounts on long term policies used by frequent shippers rather than single transit policies.

Conclusion

Marine insurance is not only for exporters and importers; it is a vital pillar of MSME insurance. Micro, small, and medium enterprises operate on tight budgets, and any loss during transit could be catastrophic for them. This loss is covered by marine insurance.

A marine insurance calculator is a tool that helps to estimate the premium for marine insurance policies. This guide has solved all your doubts about the question ‘how to calculate marine insurance premium?’

For comprehensive protection to safeguard your vessels and cargo, explore marine insurance policies from Bajaj General Insurance. Stay confident, keep growing!       

FAQs

1. What is a marine insurance calculator?

A marine insurance calculator is an online tool that estimates your insurance premium based on shipment details like cargo value, transit route, coverage type, and transport mode.

2. How to calculate marine insurance premium manually?

You can estimate the premium by calculating the sum insured (Cost + Freight + 10%) and applying the applicable rate based on risk factors, coverage type, and transport mode. However, using an online calculator simplifies this process significantly.

3. Can I use the calculator for both domestic and international shipments?

Yes. Most calculators are designed to handle both local and global shipments.

4. Is the marine insurance calculator free to use?

Yes. The marine insurance calculator is free to use and requires no commitment to purchase.

5. Can I buy the policy directly after using the calculator?

Absolutely. Once you’ve reviewed your estimated premium, you can customise your policy and buy it instantly through the website.

6. Does the calculator work for MSMEs?

Yes. In fact, MSMEs can benefit greatly from using the calculator to plan and control insurance costs for regular cargo movements.

*Standard T&C apply

**Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.