5.3.4.2 Insurance保险
Under terms of CIF or CIP,you must purchase insurance,which necessitates a calculation of the insurance premium—the money you pay to the underwriter to buy the insurance,which is often a percentage of the insured amount.The insured amount is your declared value of the goods and the most you can recover from the underwriter when risks materialize,which,according to Incoterms 2020 and UCP 600,should be at least 110% of the CIF or CIP value of the merchandise.You may wonder why it is 110% instead of 100%.According to international conventions on marine cargo insurance,the 10% markup on the CIF or CIP value is instituted to allow for the expected profit that would have been realized without the risk incident.Sometimes the markup can be 20%-30%.The following formula will guide you through this process.
insured amount = CIF or CIP value ×(1 + markup rate)
insurance premium = insured amount × premium rate
Sometimes,you are quoting not in CIF or CIP price,but FOB,CFR or CPT price,but the importer authorizes you to purchase insurance on behalf of him/her,then you need to convert from an FOB or CFR price to a CIF price or from a CPT price to a CIP price before you can calculate the insurance premium and the insured amount.Take the CFR and FOB prices as examples,the insurance premium would be calculated as follows:
insurance premium = insured amount × premium rate
= CIF ×(1+ markup rate)× premium rate
Which equals to,
insurance premium =(CFR + insurance premium)×(1 + markup rate)× premium rate
or,
insurance premium =(FOB + sea freight + insurance premium)×(1 + markup rate)× premium rate
Each of the above two formulas makes an equation that contains only a single unknown—the insurance premium,which can be solved for without much difficulty.From there you can further get the figure for the insured amount.