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Protection of personal and household property in cargo insurance

Many people think only about the transportation of industrial and manufactured goods when it comes to cargo insurance. But there’s much more to it – the general public, for instance, have a need for protection that’s offered by cargo insurance. A good example is when individuals or whole families emigrate – they certainly want to know that their personal belongings and household property are safely protected during the long journey overseas.

It is particularly important that when calculating the cost of personal cargo insurance, customers understand that there could be variances in the market value of their household possessions and furniture between Hong Kong and their ultimate destination.

If an item has a higher value in the destination market and the customer bases its value for insurance purposes on its Hong Kong value, if the item is damaged in shipment, the insurance company will treat this as under-insurance and use the “average clause” to calculate the compensation based on the proportion of under-insurance, which means that the customer will need to bear the amount of difference in the loss.

To avoid this from happening, customers are advised to provide their insurance company with a complete list of items to be transported and insured (together with the items’ brand names and Hong Kong market value) to help their insurance company ensure that the sum insured is adequate to protect the customer from personal financial loss.

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