よく使われる用語

Did you know? In India, constructive total loss claims make up about 12% of cargo insurance settlements, which amounts to a whopping ₹1,800 crores each year. This situation arises when the costs to repair or recover the cargo exceed 75% of its value, leading to a total loss compensation scenario.

Criteria and Determination Process

A constructive total loss usually happens when the costs for repairs, recovery, or forwarding exceed 75-80% of the cargo's value at its destination. Insurance surveyors evaluate the extent of the damage, the feasibility of repairs, market conditions, and whether it makes economic sense to proceed before suggesting a constructive total loss declaration. Freight forwarding companies work closely with surveyors, insurers, and customers to explore options and find the best way to settle claims for damaged cargo.

Claims Process and Settlement

To process constructive total loss claims, thorough documentation is essential. This includes damage surveys, repair estimates, market valuations, and an economic analysis that shows why repairs aren’t practical. Insurers usually need the customer to agree to the constructive total loss before settling, which often means the cargo is abandoned to the insurers. Freight forwarding companies play a key role in managing the claims process, coordinating expert assessments, and helping customers navigate their settlement options and what they mean for damaged shipments.

Strategic Considerations and Risk Management

Deciding on a constructive total loss involves weighing the potential insurance recovery against the possibility of partial recovery through repairs or selling the cargo at a loss. Having the right insurance coverage, accurate valuations, and promptly notifying about damages can help maintain the best recovery options. Freight forwarding companies offer valuable expertise in assessing damage, coordinating claims, and optimizing recovery, ensuring customers can maximize their insurance benefits while minimizing disruptions to their business from cargo losses.