The following factors
are generally taken in to a account
while determining the rating of vessels and cargo: (A) RATING UNDER HULL INSURANCE: (a) TYPES
AND TRADE: The quality and fitness of the ship
to serve as a carrier on the particular route is an important factor
considered for rating on hull insurance .
The insurer, while underwriting the risk, would like to know the ship
with regard to its builder and owner , structural strength to resist
strains adaptability to carry
various kinds of a cargo and its age,
and physical condition the types of
engine and its horse power and the special types of equipments
etc.,
The risk to be insured depends upon the vessel’s construction and according to the standard I
,e, commercial standard in the trade,. The rates of premium are determined
accordingly. (b): MANAGEMENT: The management of the ship entirely depends upon the shipowner for up keeping the
ship. In order to avoid a bad track record through negligence
, indifference, etc., the shipowner appoints efficient
officers and crew in the ship. As
the nature of risk will vary
depending upon the
efficiency of management the rates of premium will also vary. ( C ) PAST CLAIM EXPERIENCE: The number of
claim made by the insurance during the past few years is to be considered for fixing the rates of premiums. If there
were too many claims in the past, the insurer will charge higher rates of premiums
on different marine risks. (d) VALUATION OF VESSEL : The valuation of the vessel to be
insured is very important for determining the rate. The insurer while underwriting the risk, should verify
the valuation and should ask for the
valuation certificate from competent surveyors before granting the covers . Valuations includes
adjustment for the gross registered tonnage make machinery installed therein,
type, special for the gross equipments
modern gadgets nature and type of a engine, age and horse power etc.,
(e): POLICY CONDITIONS: The
liability of the insurer increases or decreases
depending upon the insurance
policy conditions given for a bearing the risk. So according to variation of liability premium varies.
(f): REPAIR COST: Extra expenditure incurred for the safety of the
vessel is also to be considered for determining the rates of premium. These
expenditures are incurred at the port
when the ship is repaired . These expenditures
or losses are expressed as particular average or general average. The
definition of particular average is that
the loss or damage must be accidently for or fortuitously caused by a
peril insured against , and it concerns solely the person interested in
the subject matter of insurance and his
underwriting . On the other hand, General
Average implies some voluntary sacrifice of the property made or extraordinary
expenditure incurred at a time of peril threatening the whole property involved in a common
maritime adventure with a view to
preserving it from the peril.
When such
sacrifice ha been made or expenditure
incurred the whole property
preserved shall contribute to the
loss sustained or the
expenditure incurred . All expenses will
be treated as a General Average expenditure. The Marine Insurance Act 1963
states that temporary repairs made for
the common safety shall be admitted as a
general average. So under the applications
of general averages the general average contributions are recoverable
from respective marine insurers insuring the ship provided the expenses do not exceed the
insured value. (g): NATURAL FACTORS AND
TOPOGRAPHY: The insurer also considers the route and terms of the contracts .
Some natural hazards are permanent in nature
and some are seasonal . For example frequency of storm , shallow
water narrow channel. ice, tides, seaquakes are to be taken into account while calculating premium chargeable on a particular route.