A deductible is the amount an insured party must pay before an insurance policy covers the remaining eligible loss. In cargo insurance and freight claims, the deductible applies when goods are lost, damaged, stolen, or affected by a covered event during transit or storage. For example, if a shipment has covered damage and the policy includes a deductible, the cargo owner is responsible for that first portion of the claim. Deductibles help determine claim value, premium cost, and overall insurance recovery. Higher deductibles lower the insurance premium but increase the policyholder’s financial exposure on each claim.
- Standard cargo insurance deductibles typically range from $250 to $1,000 per shipment
- Franchise deductibles: insurer pays the full loss if it exceeds the deductible amount
- Excess deductibles: insurer pays only the amount above the deductible in all cases
Choose a deductible that balances your premium budget with your tolerance for out-of-pocket costs on minor cargo claims.
Related terms: All-Risk Coverage, Declared Value.
