Assessment of Partial Loss under Marine Cargo Insurance?
In case of partial loss, where the value of the goods are increasing with the covering the distance like in fruits and vegetables , the claim assessment should be done as per section 71(3) of the Marine Insurance Act which states “the basis for settlement of claims for partial loss namely , that where the whole or any part of the goods have been delivered damaged at destination; the measure of indemnity is such proportion of the sum fixed by the policy as the difference between the gross sound and damaged values at destination bears to the gross sound value”. It can be explained with the help of illustration:
The insured value of consignment is Rs 4.40 lakhs and it was damaged partially and value of arrived damaged goods is Rs 1.60 lakhs and sound value of these goods is Rs 4.00 lakhs. As per customary method the claim would be assessed as per invoice value of the damaged goods i.e Rs 1.60 lakhs . But as per the stated section the claim would be assessed as Rs 2.64 lakhs not the invoice value of damaged goods.
Gross Arrived Damaged Value: Rs 1,60,000/-
Gross Arrived Sound Value (Damaged Goods): Rs 4,00,000/-
Difference: Rs 4,00,000/- -Rs 1,60,000/-= Rs 2,40,000/-
Depreciation= 240000* 100/4,00,000=60%
Claim amount 60% of Rs 4,40,000/- = Rs 2,64,000/-
It seems to be illogical but the Surveyor should follow the law of land.