The application methods and calculation methods for import and export cargo transportation insurance vary depending on the situation.
In the transportation insurance of import and export goods, the insured has two main methods of handling: individual insurance and signing an open insurance general contract.
One by one insurance refers to the purchase of separate insurance for each specific batch of goods, which is suitable for situations where transactions are frequent but the quantity of goods is small. The insurance premium is calculated based on the value of each transaction of goods and the mode of transportation.
An open insurance general contract refers to a long-term insurance contract signed between the insured and the insurance company, covering multiple shipments of goods over a period of time. This method is suitable for situations with large and frequent transactions, which can simplify the insurance operation process and reduce transaction costs.
In export goods insurance, the calculation of insurance amount and premium is usually based on the CIF price (Cost, Insurance, Freight, Cost and Freight) of the goods. The insurance company will determine the insurance amount and premium based on this price.
Insurance amount=CIF price × 110% (insurance premium)
Insurance premium=CIF price × 110% × Insurance premium rate
Among them, the insurance premium rate is set by the insurance company based on the nature and degree of risk of the goods.
For imported goods insurance, the calculation method of insurance amount and premium varies depending on the transaction terms of the goods.
For goods traded at FOB price (Free On Board):
Insurance amount=FOB price × (1+average freight rate+average insurance rate)
Insurance premium=insurance amount × Average insurance rate
For goods traded at C&F price (Cost and Freight):
Insurance amount=C&F price × (1+average insurance rate)
Insurance premium=insurance amount × Average insurance rate
The average freight rate and average insurance premium rate are determined according to the regulations of the insurance company, and they reflect the general cost of transporting goods.
Source: Souhang Network
