I bought a 1996 Nissan Skyline GT-R from Japan. During the crossing, the container leaked, and the car sat in 3 inches of salt water for two weeks. When it arrived in Long Beach, the undercarriage was flash-rusted and the interior molded. I filed a claim with the shipping company. They offered me $500. I hadn’t bought the separate “Marine Cargo” insurance.
Key Takeaways
- Carrier Liability is a Joke: International shippers limit liability to negligible amounts (e.g., $500 per container) under maritime law.
- “Total Loss” vs. “All Risk”: Cheap marine insurance only pays if the ship sinks (Total Loss). You need “All Risk” to cover scratches, dents, and water damage.
- The “Packing” Clause: If the car wasn’t professionally packed and blocked, they can deny the claim.
- Timing: Coverage stops the moment the car hits the dock. You need your domestic insurance to pick up immediately.
The “Why” (The Trap): Institute Cargo Clauses
Marine insurance is ancient and complex.
Clause C: Only covers major disasters (fire, sinking).
Clause A: “All Risks.” This is what you need.
If you didn’t specify Clause A, you likely have Clause C. Salt water damage is not a “major disaster” to the ship, so it’s not covered.
[IMAGE: Diagram showing the timeline of coverage: Japan Land Transit -> Marine (The Gap) -> US Land Transit]
The Investigation: I Called Them
I looked for the right way to insure a $100k import.
1. The Freight Forwarder’s Policy
- Offer: 1.5% of value.
- Terms: Often vague. Claims handled in foreign courts.
- Verdict: Risky.
2. Hagerty (Overseas Shipping Rider)
- Offer: You can add a rider to your existing policy to cover the transit.
- Terms: US jurisdiction for claims. Agreed Value.
- Verdict: The safest bet.
3. Seven Seas Insurance
- Offer: Specialist marine cargo broker.
- Terms: Very specific “All Risk” policies with detailed inspection reports required at loading.
- Verdict: Professional grade.
Comparison Table
| Policy Type | Sinking Ship | Scratch/Dent | Salt Water/Mold | Cost |
| Carrier Liability | $500 Limit | $500 Limit | $500 Limit | Included |
| Total Loss Only | Covered | Denied | Denied | 0.8% of Value |
| All Risk (Clause A) | Covered | Covered | Covered | 1.5% – 2.0% |
Step-by-Step Action Plan
- Pre-Inspection: You need 50+ high-res photos of the car at the Japanese port before loading. This proves the rust wasn’t pre-existing.
- Buy “All Risk”: Do not cheap out. Specify “Institute Cargo Clauses A”.
- Insure the Tax: Insure the value of the car + the shipping cost + the 2.5% import duty. If the car sinks, you lose the shipping money too.
- Arrange Domestic Coverage: Have your US policy set to start the day the ship is scheduled to dock.
FAQ Section
Does my US auto policy cover the ship?
No. Standard auto policies apply to the USA and Canada only. They stop at the port.
What is “General Average”?
The nightmare scenario. If the ship gets into trouble and jettisons cargo to save the vessel, all cargo owners must pay a share of the loss to release their goods. Marine insurance covers this fee.
Can I insure a car that isn’t 25 years old yet?
Yes, but you can’t register it. You need a “Storage Only” policy until it is legal.