To calculate imported goods insurance, first determine the CIF value. The CIF value includes the cost of the goods, insurance premiums, and freight charges. Then, multiply the CIF value by the desired insurance coverage percentage.
Cargo insurance usually ranges in cost from $400 – $1,800 per year for the annual premium. If you get a standalone cargo insurance policy, you might pay $35 – $150 per month. Three factors affect cargo insurance costs: the type of commodity, claims history, and route risk level.
The cargo insurance premium on a single shipment is the insured value times the policy rate. To calculate insured value, add the commercial invoice value plus freight costs plus 10 percent. Review insurance policy terms, especially the valuation clause, to correctly value the goods.
To calculate import duties and tariffs, first determine the duty percentage rate. Then multiply the shipment’s total value by that rate. Total value includes the goods’ value, freight, insurance, and other fees.
When shipping goods internationally, use the CIF price formula:
CIF Price = FOB Price + Insurance Cost + Freight ChargesFOB price is the goods’ cost at origin. Calculate insurance as a percentage of FOB price based on route risk. Freight charges vary by mode, distance and other factors.
To estimate insurance cost, use the following formula:
$10,000 cargo, weighing 2,000 lbs, moving 1,000 miles at a 0.05% rate:
$10,000 x 2 x 1 x 0.0005 = $10