Cars carried as cargo - how hazardous is this cargo for an Insurer ?

Marine Insurance is all about cargo and its movement from one place to another.  Underwriting is the art of evaluating the potential of the risk, deciding on offering indemnity and then deciding on the rates, terms and conditions of insurance.   A good underwriter with keen eye to details would look in to the risk studying its physical hazards and other possible situations that might render a loss or damage to the subject matter about to be insured.  The physical features of the subject matter including its fragility, susceptibility to external factors, shelf life, whether perishable, its packing, its size, they way they would be handled and whether they will withstand such handling,  its commercial value and utility value, its marketability all can impact the decision of the Insurer.

Luxury cars being transported

The car carrying truck

Cars placed in two layers

When it comes to movement of goods within the country, a very high % of it takes place by truck (lorry) – then robust cargo is considered generally better to fragile cargo.  Even bigger goods and even those which can move on its own are carried as cargo – for example all your two wheelers are transported from their factory to all dealers by truck [around 55 nos. on a single truck].  As one travels towards Sriperumpudur on the Bangalore Highway from Chennai,  one can see no. of trucks parked alongside, waiting for their turn to get load for transportation to various parts of the Country and perhaps across the Globe [in which case they would carry them till the Port] : wonder what is the cargo – the cars themselves and these are generally specially made trucks arresting the movement of cars once they are loaded on to the trucks which are closed bodied.  I have even seen tractors and big grain mowers being loaded on truck for transportation. 

Now truck is a common mode – car carriers [trucks] are robust ones specially made for such carriage – luxury and utility cars with neat commercial value – should be a good risk for the Insurers ! Are they really, ask any of your Insurer friend ??

On Sunday night (17/4/11)  - the truck carrying five cars meant for export suffered a loss.  The container lorry was gutted in fire near Poonamallee flyover in the wee hours. It is reported that the driver on hearing stopped the vehicle on the service lane, opened the door of the container, found the cars engulfed in flames and ran away abandoning the vehicle.   Good Samaritans nearby informed the Fire & Rescue Service who fought for two hours to bring the fire under control.  It is reported that the 5 brand new cars contained inside were completely gutted and rendered total loss – which amounts to a loss of not less than 20lakhs.    About 40 fire fighters, 5 fire tenders, 5 water trucks of metro water all combined to control the fire.

The badly damaged truck and the cars

It is stated that containers generally do not catch fire; it is stated that the paint material on the cars and seats fuelled the flames.  Cars though have some parts which can easily burn are not easily combustible.  An electrical fault is suspected to be reason of fire.  The exact cause may never be known. 

Closed bodies  trucks  generally have metal bodies  – open bodies trucks mostly have wooden body.   Have heard of trucks catching fire upon touching HT voltage electric lines, charring the truck and the contents that are inside.  Freak occurrences still..

For the Marine Insurer, the loss manifests in many a ways and the razor thin premium makes the portfolio thinner still…

Elsewhere, hundreds of passengers on board Mumbai-Delhi Rajdhani Express had a miraculous escape when fire broke out in 3 coaches and the pantry in the wee hours of today [19^th April 11]  while the train was speeding past Rajasthan.  The fire reportedly broke out at around 0220 am when the train was in the Kota division of West Central Railways. 

A major accident could be averted thanks to the heroic act of Pawankumar, incharge of the pantry who noticed the fire, stopped the train,alerted the sleepy passengers of the adjacent coaches to get out of the train immediately and helped in containing the fire.  He and his team reportedly ran around screaming Bahar niklo,sab chhod ke bahar niklo (Run out,leave everything and run out).  Though it was around 0220 am in the morning, still all the passengers could get out safely and combined together in fighting the fire.  After hours of halt, the train continued it journey by 0821 am going by newspaper reports. 

It is stated that the pantry car in the Rajdhani does not use gas or other flammable fuel but uses only electricity for cooking.

‘Fire can often be destructive and often the biggest of the claims for the Insurers are caused by Fire’

Regards – S. Sampathkumar.