Insuring your household articles during transit

Coverage starts from the time the goods leave the place named in the policy until delivery to the final warehouse.   | Photo Credit: Getty Images/iStock

Shifting your place of residence is stress-filled. You don’t know if your precious crystal glasses will arrive in itty-bitty shards, or if your TV or your kid’s gadgets will work when set up in your new home!

While there are no guarantees about physical damage or loss, there is an insurance policy that will cover your financial loss relating to your household effects while in transit.

Called variously as Marine Inland Transit Policy or Single Voyage Policy, it offers two covers. Inland Transit (Rail or Road) A is an All Risk cover and Inland Transit (Rail and Road) B is a basic cover for some restricted risks. The policy clearly does not include any oceangoing voyage.

Short duration policy

This is a short duration policy with coverage starting from the time the goods leave the place named in the policy for the commencement of transit and continues during the ordinary course of transit, including customary transhipment if any, until delivery to the final warehouse at the destination named in the policy.

You or I can avail of this policy for shifting of household goods.

For a consignment from Chennai to Mumbai valued at ₹25 lakh, the premium for the basic cover works out to about ₹3,200 and if you add Strike, Riot and Civil Commotion covers you pay about ₹600 extra.

Policy A covers all risks as the name suggests. Standard exclusions are loss, damage or expense: due to wilful misconduct of the assured, ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of the subject matter insured, due to insufficiency or unsuitability of packing or preparation of the subject matter insured, proximately caused by delay even though the delay be caused by a risk insured against, or caused by inherent vice or nature of the subject matter insured.

Also excluded are loss, damage or expense caused by: war, civil war, revolution rebellion, insurrection or civil strife arising therefrom or any hostile act by or against a belligerent power, capture, seizure, arrest, restraint or detainment or attempts at these and their consequences, derelict mines, torpedoes, bombs or other derelict weapons of war.

The policy will not pay for loss, damage or expense caused by strikers, locked out workmen or persons taking part in labour disturbances, riots or civil commotions, resulting from strike, lock-outs, labour disturbances, riots or civil commotions or caused by any terrorist or any persons acting from a political motive.

This set of exclusions, called the Strike, Riot and Civil Commotion (SRCC) exclusion can be covered specifically on payment of extra premium.

Policy B, the basic cover, is specifically only against loss, damage or expense caused due to fire, lightning, breakage of bridges, collision with or by the carrying vehicle, overturning of the carrying vehicle, derailment or similar accidents to the carrying railway wagon/ vehicle.

The same set of exclusions apply and SRCC cover is available on an opt-in basis.

Insurable interest

For being entitled to a claim under the policy, the assured must have insurable interest in the goods insured at the time a loss occurs.

The claim will not be paid to your carrier, either your road transporter or the railways, or any bailee like a warehouse.

As in any insurance policy, you, as an insured, have to make all efforts to minimise losses and help the insurance company have recourse to your carrier to pursue any recoveries or reimbursement of losses.

There is usually an excess of about 0.5% or a minimum of ₹5,000 on every claim.

Reasonable, considering you can at least buy a new TV if your old one is damaged in a highway accident!

(The writer is a business journalist specialising in insurance and corporate history)

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Printable version | Apr 15, 2021 12:30:41 AM |

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