When you have a Marine Cargo Insurance policy, the hope is that you never have to use it. But knowing the Marine Cargo Insurance claims process can help you better protect your company’s interests. As an example, let’s say you’ve just received a scheduled shipment of widgets. Upon inspection of the shipment, you notice that a pallet of widgets has gone missing! However, if you have Marine Cargo Insurance your next step is to submit a claim to recover the loss. We’ll let’s walk through the claims process step by step to get you an insurance settlement as efficiently as possible. There are three phases in the overall process of handling a claim
1. Notification
2. Information gathering
3. Determination
Phase one: Notification.
The very first thing you need to do upon discovering you may have a claim is to notify the insurance company. Whether you prefer to make a phone call or to send over quick email, the earlier you notify your claims, the more effectively your claim can be handled. Think of this step the same way you would if you were in a car accident. You wouldn’t wait a week to let your auto insurance provider know you may have a Marine Cargo Insurance claim. You would connect with them immediately, maybe even right after calling the police. There should be the same consideration for a claim on your marine cargo insurance. Once you’ve notified you will receive a few forms to fill out or send to the appropriate parties involved in the claim. The first is a Claims Notification Form and it gives a summary of the claim details to insurance provider. When completing this form, make sure you provide an estimate of the damaged value. This is not the final amount you will be paid out, instead it is there to give your claims a scope of the size and severity of the claim. In order to take the proper next steps in the Marine Cargo Insurance process, also be sure to include the information on who to contact about the claim. This form can also be found directly on the insurance provider website where it can be downloaded, filled out, and submitted as soon as a claim arises. The second thing you will need to do immediately is Reserve Your Rights in writing with the responsible party. Reserving your rights is the act of notifying the responsible party that you have suffered a loss and may have a claim. On average, a customer has 14 days to reserve their rights with the carrier and that is 14 days from the time the shipment has departed not from arrival at destination. Once this notification to the responsible party has been sent in writing, you as the policyholder, have effectively stopped the clock and will be able to take your time gathering the documents needed for the next phase of the claims process. The most important thing to note in phase 1 is: DO NOT WAIT. Send these notifications as soon as you think a claim may arise. A false alarm is much better for your policy than a late notice and can be easily closed without an impact on your rates.
Phase 2: Information Gathering.
There are two paths when it comes to the process of gathering information for a marine insurance claim. The path your claim will take is determined by the size and circumstances of the claim. Typically a claim is considered large when it is for $5,000 or more, but this is ultimately determined by the insurance company. If you have a smaller claim, the process is pretty simple. You will be required to provide documents substantiating a claim. Your insurance agent will explain what documents are needed or where to find typically requested information as you go. The adjuster will then review the documents and provide a settlement on the claim. However, if it is a larger amount, a surveyor is assigned to the claim. Typically the surveyor will contact you, the assured, directly to schedule an inspection at your earliest convenience. Once the surveyor conducts the inspection they will also collect all of the required documents and provide them to the adjuster. At this point the adjuster will review the documents and the surveyors report and send any questions. It’s very important that you remain responsive to the surveyor, as the adjuster cannot make a decision until the surveyor submits a final report. In the information gathering phase, it is important for you, the policyholder to provide any and all necessary documents that may have an influence on the claim. Documents can still be filed in the determination phase, but this may delay finalizing the claim.
On to Phase Three: Determination.
Once the adjuster has all of the information needed, there are two questions that have to be answered: first is the claim covered by the insurance policy in place? If the answer is yes, then they move directly on to the next question: how much is the policyholder entitled to recover? This process of determination is completely based on the policy and the documents submitted in the information gathering phase. Remember the insurance company does not know about an expense involved in a claim unless the policyholder tells them, although insurance claims specialists can usually anticipate a typically claimed expense or the application of enhancement clauses. The final claim settlement is determined in the following general order; first determine how much of the cargo is lost or damaged and the value of that cargo, second take into account any other payments received for the claim from other parties (for example UPS is liable for the maximum amount of $100 per package, so that payment would be deducted from the overall claim), from there any enhancement clauses on the policy are considered to determine if they affect the claim payout, then any penalties accrued during the claims process are also applied. These penalties could be for things like filing the claim late, infringing on subrogation rights, or for under insuring the total value of the goods. However, these are rarely applied when the policyholder maintains communication with insurance provider throughout the process as we can keep an eye out to avoid penalties. At this point the deductible is applied to the claim and the settlement is then submitted to the policy holder for approval. Once approval is received, the settlement is delivered. Depending on the size of the claim, you may be asked to sign a Subrogation Receipt after ordering payment of the claim. This basically confirms your claim has been settled and gives the insurance company permission to seek subrogation from whoever caused the damage. And that’s it! The full process of a Marine Cargo Insurance.
For more detail you can contact us.