Ad valorem transport insurance
An insurance policy that covers goods up to their actual value, as opposed to the carrier's limited coverage.
Ad valorem transport insurance
Ad valorem insurance is a transport insurance policy which covers goods up to their actual commercial value (generally CIF + 10 to 20% for the expected profit), as opposed to the limited liability of the carrier.
Why is ad valorem insurance necessary?
The liability of carriers is capped by international conventions. By sea (Hague-Visby Rules), the limit is 2 SDR/kg or 666.67 SDR/package. By air (Montreal Convention), 22 SDR/kg. On the road (CMR), 8.33 SDR/kg. For valuable goods, the carrier's compensation is therefore much lower than the actual loss.
Encrypted example
A 50 kg package containing electronics worth EUR 10,000. By sea, the maximum compensation from the carrier would be around 130 EUR (2 SDRs × 50 kg). Ad valorem insurance would cover the 10,000 EUR + the expected profit.
Font Types
- Travel policy: for a single expedition
- Subscription policy (floating policy): automatically covers all shipments of an insured for a given period
- Third-party shipper policy: taken out by the freight forwarder on behalf of its customers
Loss declaration
In the event of a claim, the insured must make reasoned reservations to the carrier upon delivery, inform their insurer within 5 days and prepare the claim file (report, invoices, photos, expertise).
Cost
Ad valorem insurance premiums vary from 0.1% to 1% of the insured value depending on the nature of the goods, the route, the mode of transport and the claims history.