Cargo Insurance vs. Property Insurance

    In Florida, we live in paradise but we pay for it. One of the more literal ways we pay for is in the price of property insurance. The whole country is now aware of our property insurance problems. Homeowners Insurance gets the most attention, but business owners really see it in the property insurance rates for their buildings and business personal property. Last year I was in St. Paul, Minnesota for a seminar at Travelers Insurance for technology insurance. There were agents there from all over the country. One lady from Wisconsin was telling me that she was competing to write a large building and she received a $0.045 rate. What that means is that for every $100 of insured value, the insurance company is charging 4 ½ cents. At that same time I was seeing property rates come down to $3.00 in Miami from up as high as $4.00. Even our property rates excluding windstorm are higher than 4 ½ cents.

    In Miami we have to worry about the wind, the rain, the storm surge, but on a more constant basis we have to worry about all other perils. Maybe in Wisconsin when there's a fire, it's just a fire, but in Miami, a lot of times its Arson. We also have a lot more thefts, vandalisms, auto accidents, ect.

    So that is the back drop on why rates are so high in Miami. Now, what can you as a business owner do? If you're a wholesaler, distributor, exporter, importer or freight forwarder you can save a lot of money insuring your goods. The rates on insuring goods in warehouse are a lot less expensive than insuring stationary business personal property. You need to insure cargo, but you're probably paying for it through a freight forwarder or your distributor.