THE CUBA REVIEW 



17 



[MARINE INSURANCE CAUTION 



This article is wTitten to extend a word of 

 caution to anyone having occasion to phice 

 marine insurance, to see that the insured value 

 of any shipment is sufficient to afford full pro- 

 tection in case of loss. There are many whose 

 experience in placing marine insurance is 

 necessarily limited and to such the insuring 

 of their goods at factory value or, at the most, 

 factor\- value plus freight, may seem all that 

 is necessary, and any further increase of valu- 

 ation merely a waste of premium. 



The experienced shipper goes a step further 

 and adds to the purchase value and freight 

 such percentage as will bring the insured 

 value to approximately the wholesale selling 

 value (less duty) at destination. If shipping 

 to a country where duties are compulsory, 

 once documented, whether landed or not, he 

 will frequently cover this risk at a small addi- 

 tional premium. In the case of Cuba, per- 

 haps 15 "^ added to the cost, freight and insur- 

 ance premium would be a safe percentage 

 and customs duties are not compulsorj- where 

 goods are not landed or are abandoned if 

 damaged to the extent of 10*^7 of their value. 



The importance of all this is manifested when 

 a loss occurs, but peculiarly so when the ship- 

 ment is involved in a general average and the 

 owner is called upon to contribute a certain 

 percentage of the value Vjefore the goods are 

 delivered if sound or which percentage will 

 be deducted from the reimbursement for 

 damage or total loss. The value u.sed in 

 these general average computations is the 

 wholesale selling value at destination, and if 

 the insurance is placed for less the insuring 

 company will pay only on the amount insured. 

 An illustration will make the point clear. A 

 shipment valued at $11,000 cost and freight, 

 and insured accordingly, may well be worth 

 $13,000 wholesale selling value (duty excluded) 

 at port of destination. Suppose a general 

 average contribution of 5% to be necessary. 

 It is obvious the insurance company will pay 

 but $550 and the owner of the goods must 

 shoulder the payment of $100 since the total 

 contriVjution is $t>50. 



The custom of taking the foreign value has 

 been evolved through years of experience and 

 by thousands of cases, and, with other cus- 

 toms of average adjusters has been tested in 

 the courts and found to be sound. A mom- 

 ent's reflection will convince that it is in the 

 highest degree equitable since it is based on 

 the principle of recognizing the buyer's profit 

 as well as that of the seller. If all shipments 

 to one buyer were to incur marine loss, and 

 he were reimliursed for the cost only, he could 

 not long remain in business. 



If the goods are lost under conditions which 

 do not involve general average or are damaged, 

 the insuring company will pay on the l^asis of 

 the insured value only and the same principle 

 — the buyer's loss of profit — appears though 

 not of course made so apparent to the shipper 

 as when a general average occurs and a con- 

 tribution is exacted. 



It is to be hoped that the caution here given 

 will enable such of our readers as have not had 

 these points brought home by previous ex- 

 perience to avoid the disagreeable necessities 

 of pro-rating a loss or assuming the payment 

 of compulsory customs duties. 



CHANGES IN WAR RISK INSURANCE 



The Bureau of War Risk Insurance, Treas- 

 ury Department, Washington, D. C, an- 

 nounces the following rates from any ports in 

 the United States to any ports in the world 

 (other than those named in the special list) or 

 vice versa (which supplants the schedule pub- 

 lished in Commerce Reports for Januarv 13, 

 1915): 



Cargo: Freight and Advances. 



1. Between ports of the United States, its 

 possessions, or any non-belligerant ports in the 

 Western Hemisphere, one-fourth of 1 per cent. 

 ^ 2. Between ports on the west coast of the 

 United States and Japan, 5 cents per $100; 

 between ports on the west coast of the United 

 States and China or the Philippines, 10 cents 

 per $100. 



To non-belligerant ports other than above 

 and not north of Havre in Europe, nor east of 

 Sicily, in the Mediterranean, one-half of 

 1 per cent. 



Vessel {Voyage Risks). 



By vo\'age, meaning from port of loading to 

 not more than two ports of discharge. 



1. Between ports of the United States, its 

 possessions, or any non-belligerant ports in 

 the Western Hemisphere, one-fourth of 1 

 per cent. 

 ^ 2. Between ports on the west coast of the 

 United States and Japan or China, one-fourth 

 of 1 per cent. 



3. To other non-belligerant ports not north 

 of Havre, in Europe, nor east of Sicily, in the 

 Mediterranean, one-half of 1 i)er cent. 



4. Other ports, three-fourths of 1 per cent. 



Vessel {Time). 



Time policies to be issued for a period of 

 90 days only, rate of IJi per cent. 



If the insured agrees to a warranty reading 

 "Warranted using only non-belligerant ports 

 in the Western Hemisphere," rate of five- 

 eighths of 1 per cent. 



All rates subject to change without notice 

 and effective from the date thereof. 



Dated Washington, D. C, Feb. 15, 1915. 



Changes in Policies. 



On and after February 20, 1915, the follow- 

 ing clause will appear on all cargo policies 

 issued by the Bureau of War Risk Insurance: 



Warranted that the title to the propertv in- 

 sured remains continuously in citizens of the 

 United States during the term of this policy. 



All these poHcies will have the words "to 

 order" inserted after the name of the payee. 



