Cargo Insurance Costs & 3 Little-Known Issues You Must Avoid

Max from Northcote

Here are the essential steps before you buy the cargo insurance to reduce complications.

YOU WILL LEARN:
- How to save money on cargo insurance
- The costs to insure your goods in New Zealand
- Three common mistakes that you need to avoid
- And other practical tips you can implement today!

Today we are going to talk about New Zealand cargo insurance costs and three little-known issues you must avoid.

The important thing to remember is that these are the estimates only. We are going to talk mainly about new goods because if you import or export used personal effects, vehicles or any perishable goods the estimates and prices will be much different.

#1. The Cost of New Zealand Cargo Insurance

Another significant fact to keep in mind is that the more goods you send, the cheaper your rate is. In this case, we are going to talk about a company that imports about every three months.

If you import new commercial goods, you should allow at least 1% of the insured amount.

For example, if you import a shipment valued at about NZD 20,000 your insurance premium is going to be NZD 200 and so on. However, if you import less than NZD 20,000 worth of goods your insurance premium is still going to be NZD 200 because insurance companies have got minimum fees to cover their costs.

If you become a regular importer and start to import every month instead of paying NZD 200 every month and NZD 2,400 over a year you may be able to negotiate a cheaper rate and save many thousands NZD in the long term.

I have just explained you briefly how much does it cost to buy New Zealand cargo insurance. It is going to be roughly 1% of the insured amount. And the best industry practice is to use the cost of the goods, add all your shipping fees and another 10%.

For example, if the cost of the goods is NZD 25,000 and your shipping fee is NZD 5,000 that is NZD 30,000 in total. Then add another 10% on top that is other NZD 3,000 and your insured amount should be NZD 33,000.

I should say 1% of that is NZD 330. Therefore, your insurance premium is going to be NZD 330 to insure NZD 33,000 worth of goods.

Mistake #1: You Get Insurance from an Overseas Company or the Supplier

The first mistake that a lot of importers do is that they get insurance from the overseas company or they get the insurance from the supplier.

This is not ideal even though your supplier is trying to help you and they give you at least something, and you have a choice to buy it or not.

But this is not the best insurance company that you can get. For example, if there is an insurance claim or something happens you have to get your money back as soon as possible.

Imagine how it is going to play out for you. In many ways, this insurance company is based overseas and you have to call them after hours. It is very inconvenient for you.

Another thing that can be is a language barrier. For instance, if they buy somewhere in Asia and it may not be the easiest way for you to communicate.

Having an insurance company based overseas also gives you less control because a lot of insurance companies are governed by the New Zealand law.

You have better protection when you use the insurance company based in New Zealand. In many cases, if you cannot come to an agreement with the insurance company you are able to visit their office having a personal meeting.

If you do not understand something they can meet you and explain.

Especially remember if you import something very available, if you have got a full container and the cost of the goods can be NZD 30,000 or NZD 100,000 or have purchased an insurance from a reputable company somewhere in Europe you still can have some struggles with getting full details, fast replies or having a chat with a real human.

However, in my experience, if you do it in New Zealand, it is going to be more efficient for you.

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