What is the standard deductible under ocean marine insurance?

The correct answer is grounded in the nature of ocean marine insurance, which typically employs a franchise deductible. A franchise deductible operates under the principle that if a loss meets or exceeds a specified threshold, the insured is fully compensated for the loss. However, if the loss is below this threshold, no claim is paid at all. This type of deductible incentivizes policyholders to manage risk effectively, as they will absorb smaller losses but receive full coverage for significant ones.

In ocean marine insurance, this approach aligns with the variable nature of maritime risks and loss incidents. It allows for greater flexibility and can be more manageable for insurers, as they can avoid processing smaller claims that may not warrant the administrative costs associated with them.

Other options like a percentage deductible, fixed amount, or variable deductibles tied to cargo types do not accurately reflect the standard practices in ocean marine insurance, where franchise deductibles are more common.