What is the standard deductible under ocean marine insurance?

The correct answer is the franchise deductible for losses that meet or exceed a specified amount. In ocean marine insurance, a franchise deductible is a unique feature where the insurer only pays for losses that exceed a certain threshold. If the loss is below this threshold, the insurer does not cover it at all. This type of deductible encourages policyholders to manage smaller losses independently, which can help keep insurance costs down.

Understanding this concept is important because it directly influences how policyholders view their insurance and manage risks associated with maritime operations. By having this structure, insurers can avoid paying for minor claims, allowing them to allocate resources more effectively and maintain lower premiums for policyholders. The franchise deductible aligns with the nature of marine insurance, where risks and losses can fluctuate significantly based on various factors affecting the cargo and its journey.