There is no legal obligation to make marine insurance. However, marine insurance has become a financial necessity due to banks' insurance assurance requirements in commodity shipping (freight) insurances, the high amount of risk-exposed amounts in hull insurances, and the mortgage creditor's demand for insurance coverage.
Marine insurance is international. In the insurance of the cargo subject to foreign purchase or foreign sale, both buyer and seller must agree on a standard and internationally recognized insurance guarantee, as one of the parties to the sales contract will be foreign. On the other hand, the same obligation in the hull insurance applies in terms of Foreign third parties (ship, port authority, etc.) to whom the vessel may be engaged during its operation. Therefore, as in many countries, the cargo and hull clause sets prepared by the Institute of London Underwriters, which have found a general acceptance and usage area all over the world, are added and used as a special condition to the marine insurance policy.
We can explain the factors that affect the pricing of commodity marine insurance in four sections. Type of goods, packaging, mode of transport
Scope of coverage
The factors that play a role in the pricing of the hull can be summarized in five sections. Type of vessel:
- Insurance cost of the vessel
- Age and tonnage of the vessel
- Scope of vessel
- Sailing area and activity area of the vessel