Exactly 100 years have passed since the pride of White Star Line, RMS Titanic, struck an iceberg in the Atlantic and sank and lost more than 1,500 people.
The centenary has prompted many insurers on both sides of the Atlantic to release documents relating to the largest marine loss to date in terms of relative costs, which mostly show their company’s involvement in claim payments.
When the Titanic sank on April 15, 1912, a Lutin bell was rang in Lloyd’s of London, and a very fast claims process began.
A few months ago, the shipowners, the White Star Line, instructed insurance brokers Willis Faber and Co. To create hull cover, cargo, contents and personal effects. Willis Faber passed the “coupon” to their Lloyd Commercial Division where it was subsequently evaluated and underwritten by various unions and insurers working on behalf of the members.
The Titanic structure was insured for a total loss of $ 5 million, or just over a million pounds, at the exchange rate at the time. The document also included covering the total losses of goods in the amount of 600 thousand dollars and its contents in the amount of 400 thousand dollars, equivalent to two hundred thousand pounds.
The original brokerage slip passed around Lloyd is lost, but is pictured and can be seen in Wright and Fayles’s 1928 book, A History of Lloyd’s. It appears that seven large insurance companies assumed nearly forty percent of the risks between them and that the other sixty percent were underwritten by more than seventy individuals and Lloyd’s “names”.
According to documents recently released by Willis, the marine insurance policy costs White Star £ 7,500 or $ 38,000 to insure the Titanic at a rate of 15 shillings per hundred. Modern day rates for cruise liners are much lower.
The vessel was largely uninsured for only five eighths of its replacement cost. This was apparently because the owners believed the structure to be unsinkable and were prepared to take an additional $ 3 million in risk themselves.
Willis states that although the owners believed the ship was unsinkable, they encountered a problem with all of the hull cover being placed in Lloyd’s and about forty thousand pounds were secured in Germany. There was also a very large or deductible surplus of 15% of the insurance value.
Four days after the Titanic sank, the US Senate conducted a preliminary investigation at the Waldorf Hotel in New York. The surviving officers of the ship presented their evidence to the committee in which they described the events of the sinking and signed a so-called “protest” allowing insurance claims to be paid.
The White Star was incredibly reimbursed for the loss of the hull within seven days of the sinking, assumed minus the increase, and was paid in full on the loss of cargo and contents within thirty days.
However, they are largely insured due to their liability to others due to the value of the people on board. Claims against the company exceeded its coverage by more than $ 1 million and whether they have special coverage for incidents P and I for their employees’ liability, remains a mystery. Suffice to say, payments to families of the missing crew members were minimal.
Losses of people claims amounted to more than five times the value of the ship, for those lucky enough to happen to have life insurance policies or take in passenger personal accident coverage. Although no disputes over the loss of life occurred, families had to wait much longer than White Star to receive compensation.
The final payment for the human losses has not been fully confirmed as more than one hundred and fifty life insurers have participated in coverage on both sides of the Atlantic. American companies accounted for the bulk of the claims, due to the many wealthy businessmen and millionaire family members who drowned.
The total loss is estimated to be around $ 20 million, and it was one of the largest payments by Travelers Insurance in Hartford that paid a life insurance policy of more than $ 1 million.
The sinking of the Titanic also caused the first and only insurance claim for a car that collided with an iceberg, by Sir William Carter who claimed five thousand dollars for the 25 Renault horses he lost at sea.