Hello. Today we’re gonna talk about New Zealand cargo insurance costs and three little-known issues you must avoid. And we’re starting right now. If you want to learn more about other business tips, then subscribe to this channel. My name is Max and you can ask me any additional questions down in the comments below. Important things to remember is that these are the estimates only. And we’re gonna talk mainly about new goods because if you import or export, use personal effects, vehicles or any perishable goods the estimates and prices will be much different. Another important fact to remember is that the more goods you send the cheaper your rate is. And in our case we’re gonna talk about a company that imports roughly about every three months. If you import new commercial goods then you should allow at least one percent of the insured amount. For example, if you import a shipment valued at about twenty thousand New Zealand Dollars then your insurance premium is going to be two hundred New Zealand Dollars. If it’s thirty thousand New Zealand Dollars then your insurance premium is gonna be three hundred New Zealand Dollars and so on. However, if you import less than twenty thousand New Zealand Dollars or, for example, ten thousand New Zealand Dollars worth of goods then your insurance premium is still gonna be two hundred New Zealand Dollars, because you have to remember that insurance companies have got minimum fees to cover their costs. In saying that, if you become a regular importer and start to import every month instead of paying two hundred New Zealand Dollars every month and over a year two thousand four hundred New Zealand Dollars you may be able to negotiate a cheaper rate and save yourself in the long term many thousands dollars. I’ve just explained you briefly how much does it cost to buy New Zealand cargo insurance. Roughly it is going to be one percent of the insured amount. And the best industry practice is to use the cost of the goods, add all your shipping fees and then add another ten percent. So, for example, if the cost of the goods is twenty five thousand New Zealand Dollars and your shipping fee is five thousand New Zealand Dollars. In total that’s thirty thousand New Zealand Dollars. Then add another ten percent on top. So, that’s other three thousand New Zealand Dollars. So, your insured amount should be thirty three thousand New Zealand Dollars. One percent of that is three hundred and thirty New Zealand Dollars. So, that’s your insurance premium is going to be around three hundred and thirty New Zealand Dollars to insure thirty three thousand New Zealand Dollars worth of goods. 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, while this is better than nothing. This is not ideal because your supplier actually 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 and something does happen and you have to get your money back as soon as possible. Imagine how it is gonna play out for you. In many cases, this insurance company is based overseas and you have to call them after hours. It’s very inconvenient for you. Another thing is that there can be a language barrier. For example, 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. And you have a lot better protection when you use the insurance company based in New Zealand. In many cases, if worse comes to worse and you cannot come to some 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 you. Especially remember if you import something very available, if you’ve got a full container and the cost of the goods can be thirty thousand, fifty thousand or hundred thousand New Zealand Dollars, even though if you’ve purchased an insurance from a reputable company somewhere in Europe you still can have some struggles getting full details or fast replies or giving on the phone and having a chat with a real human. Whereas, if you do it in New Zealand it is gonna be a lot more efficient for you, in my experience. The second common mistake is that your insurance policy may actually not be activated or some of the details do not meet the requirements that you’ve had in the first place. So how can this happen? If you imagine your shipment being arranged from overseas to New Zealand and you’ve emailed all the instructions to your insurance broker they can have even emailed you back the insurance certificate. But there can be a human error, a computer error where this policy may not actually be activated. So, to avoid this, if I were you I would send one quick email to this insurance company with a copy of the insurance certificate asking them to confirm in writing, whether this insurance certificate has been activated and it’s done in the benefit of your company or the company that you specified. Another thing to remember is that even though you have emailed all the instructions to the broker, how you want this insurance certificate to work and what kind of goods you want to cover, you still have to check the final document to make sure that on the document it shows everything that you want. Some of the things, some of the common mistakes on the insurance document there can be wrong currency or the insured amount is less than what you want. Another thing that can be wrong on the documents is they declare description of the goods. For example, you have some fragile items but the insurance certificate says only non-fragile items. So, if you’ve got something damaged, broken and it turned out to be glass or something fragile the insurance company unfortunately has a way out because you’ve paid less for something that is not fragile but you’ve got something that is fragile. And it is a high risk. So, you have to be careful. You have to read all the documents. In the end, the insurance broker is the middleman and even though they are trying to help you, you pay them for a service to do the insurance. But it is even though you may be able to win the case if you go to court. But nobody wants to go through the court. Everyone wants to avoid mistakes and it’s in everyone’s benefit to spend a couple of minutes, double-check the insurance certificate, make sure that everything is correct. The third mistake that a lot of companies do is that they do not get multiple options with different excess amounts. The excess is the amount you have to pay towards your insurance claim. For example, if you insure a full container valued at hundred thousand New Zealand Dollars and you can select a zero excess, meant to pay, for example, one thousand New Zealand Dollars in insurance premium. But if you increase your insurance access to, for example, two thousand New Zealand Dollars your insurance premium can drop to five hundred New Zealand Dollars. So it’s half. And if you do it on a regular basis in the long term you can save yourself thousands of dollars. In any case, it does not cost you to ask for all the options. You can have different excess amounts and you can select the ones that you are comfortable with. In my situation, if it was my shipment I would select the highest possible excess that my business can afford because the chances that something happens and you have a big loss are very little. But it is a good thing to have insurance. It is a peace of mind. And if you increase your excess you can lower your costs by quite a bit. I would give you a bonus tip. It’s gonna be a lot more easier for you whether you have insurance or not is to take photos of the goods while it is still in the factory of your supplier because you have a lot better chance to show to the insurance company or to your freight forwarder of the conditions of the goods before it’s been damaged if it was them. In some cases, the insurance company or the freight forwarder or the warehouse can blame the importer or the exporter saying “hey well, we have already received these goods and they were damaged or your supplier have not packaged them properly”. However, if you had the photos it’s gonna be a solid proof for you to show them that you’d got proper packaging, your goods were not damaged and it’s gonna speed up your resolution process. If you enjoyed this information, please, subscribe to this channel, hit the like button and ask any questions down in the comments below.