How Do You Know When to Bill Insurance for Minor Auto Damage?

Financing international trade

Documentary credits

A company which sells goods or services to other countries is known as an exporter. A visitor which buys products from other countries is called an importer. Payment for imported products is normally past documentary credit, too chosen a letter of credit. This is a written promise by a banking company to pay a certain corporeality to the seller, within a fixed period, when the bank receives instructions from the buyer.

Documentary credits have a standard form. They by and large contain:

■ a short description of the goods

■ a list of shipping documents required to obtain payment (encounter C below)

■ a final shipping date

■ a last date (or expiration date) for presenting the documents to the bank.

Documentary credits are usually irrevocable, meaning that they cannot exist changed unless all the parties involved agree. Irrevocable credits guarantee that the bank which establishes the letter of credit will pay the seller if the documents are presented inside the agreed time.

Bills of exchange

Another method of payment is a bill of substitution or draft. This is a payment demand, written or drawn upwardly by an exporter, instructing an importer to pay a specific sum of coin at a future date. When the bill matures, the importer pays the money to its bank, which transfers the money to the exporter's bank. This bank then pays the coin to the exporter later deducting its charges.

A banking company may agree to endorse or accept a pecker of exchange before it matures. To endorse a bill is to guarantee to pay it if the heir-apparent of goods does not. If a bill is endorsed by a well- known bank, the exporter tin sell it at a disbelieve in the fiscal markets. The discount represents the interest the buyer of the bill could take earned between the date of purchase and the bill'south maturity engagement. When the bill matures, the heir-apparent receives the full amount. This style the exporter gets most of the money immediately, and doesn't have to wait for the buyer to pay the bill.

Export documents

Exporters have to ready a number of documents to get with the shipment or transportation of appurtenances.

■I The commercial invoice contains details of the goods: quantity, weight, number of packages, price, terms of commitment, terms of payment, and information almost the transportation.

■ The beak of lading is a document signed by the carrier or transporter (due east.g. the send's master) confirming that the goods have been received for shipment; it contains a brief description of the appurtenances and details of where they are going.

■ The insurance certificate also describes the goods and contains details of how to claim if they are lost or damaged in transit - while being transported.

■ The document of origin states where the goods come up from.

■ Quality and weight certificates, issued by individual inspection and testing companies, may be necessary, confirming that these are the correct goods in the right quantity.

■ An export licence giving the right to sell detail goods abroad is necessary in some cases.

Are the post-obit statements true or faux? Find reasons for your answers in A, B and C opposite.

1 With a letter of the alphabet of credit, the heir-apparent tells the bank when to pay the seller.

2 Letters of credit are only valid for a sure length of fourth dimension.

3 An exporter usually has the right to change a alphabetic character of credit.

4 The bill of lading confirms that the goods take been delivered to the buyer.

5 With a bill of exchange, the seller can get virtually of the money before the buyer pays.

6 Bills of exchange are sold at less than 100%, just redeemed at 100% at maturity.

Put the sequence of events in the correct order. The last phase is b. Wait at B opposite to help you.

a A bank accepts or endorses the bill of exchange.

b The accepting bank pays the total value of the bill of exchange to whoever bought it. c The exporter sells the bill of substitution at a discount on the money market, d The importer receives the goods and pays its bank, e The importer's bank transfers the money to the accepting bank.

45.1

45.two

f The seller or exporter writes a bill of substitution and sends it to the buyer or importer (and ships the appurtenances).

45.3 Find verbs in A, B and C opposite that can exist used to make word combinations with the nouns beneath. Then use the correct forms of some of the verbs to consummate the sentences.

a nib of exchange

appurtenances

one Exporters tin can get paid sooner if a neb of exchange is past a bank.

two The bill of lading and the insurance document both the goods.

3 Exporters..................... goods to foreign countries.

4 The transporter..................... a document confirming that it has................ the goods.

5 In gild to exist paid, the exporter has to the shipping documents to a specific

banking concern.

Ov&r +o tjpu

Which banks in your state specialize in trade finance? Which aspects of merchandise finance would be the most interesting if y'all worked in this field?

Incoterms

Ship and additional costs

Companies exporting or importing goods employ standard arrangements called Incoterms - brusque for International Commercial Terms, established by the International Chamber of Commerce (ICC) - that state the responsibilities of the buyer and the seller. They determine whether the heir-apparent or the seller will pay the additional costs - the costs on top of the cost of the goods. These include transportation or shipment, documentation - preparing all the necessary documents, customs clearance - completing import documents and paying any import duties or taxes, and transport insurance.

The East and F terms

There are thirteen different Incoterms that can exist divided into 4 different groups: an East Term (Deviation), the F Terms (Free, Principal Carriage Unpaid), the C Terms (Main Wagon Paid), and the D Terms (Delivered/Inflow). Each grouping of terms adds more responsibilities to the seller and gives fewer to the buyer.

The Due east term is EXW or Ex Works. This means that the heir-apparent collects the goods at the seller's ain premises - place of business organisation - and arranges insurance against loss or impairment to the goods in transit.

In the second group, the F terms, the seller delivers the goods to a carrier appointed past the heir-apparent and located in the seller's state. The buyer arranges insurance.

■ FCA or Free Carrier means that the goods are delivered to a named place where the carrier tin load them onto a truck, train or airplane.

■ FAS - Free Alongside Send means that seller delivers the goods to the quay next to the ship in the port.

■ Pull a fast one on - Gratis On Board means that the seller pays for loading the goods onto the ship.

The C and D terms

In the third group, the C terms, the seller arranges and pays for the carriage or transportation of the goods, just non for the payment of community duties and taxes. Transportation of goods is as well known as freight.

■ In CFR - Cost and Freight (used for ocean freight) and CPT - Carriage Paid To ... (used for air freight and land freight), the buyer is responsible for insurance.

■ In the terms CIF - Cost, Insurance and Freight (used for ocean freight) and CIP - Carriage and Insurance Paid To ... (used for air freight and land freight), the seller arranges and pays for insurance.

In the 4th group, the D Terms, the seller pays all the costs involved in transporting the goods to the country of destination, including insurance.

■ In DAF - Delivered At Frontier, the importer is responsible for preparing the documentation and getting the goods through customs.

If the goods are delivered by transport to a port, the two parties can choose who pays for unloading the goods onto the quay. The two possibilities are:

■ DES - Delivered Ex Ship - the heir-apparent pays for unloading the goods from the send

■ DEQ - Delivered Ex Quay - the seller pays for unloading the goods from the ship to the quay, and for the payment of customs duties and taxes.

If the goods go through customs and are delivered to the heir-apparent, there are 2 possibilities:

■ DDU - Delivered Duty Unpaid - the heir-apparent pays any import taxes

■ DDP - Delivered Duty Paid - the seller pays any import taxes.

46.1 Label the diagram using the abbreviations for Incoterms. Await at A, B and C reverse to aid you.

Seller delivers to a carrier in its country

buyer

Seller delivers to a port of shipment

exports i

one ................... Buyer collects

PORT OF DESTINA

Seller delivers to a port of destination

Seller

delivers to the customs by air or land

exports i

Seller delivers to heir-apparent 12 or 13

How do imported goods normally make it in your state? Are in that location taxes on imported products? If you were an importer, would you prefer to organize ship yourself, or let the seller practice information technology?

Insurance

Insuring confronting risks

Insurance is protection against possible financial losses. Individuals, companies and organizations can make regular payments, chosen premiums, to an insurance visitor which accepts the risk (or possibility) of loss. When you lot purchase insurance you make a contract, called a policy, with the insurance visitor - also known as the insurer. The contract promises that the visitor will pay you if you suffer loss of or impairment to property, or sickness or personal injury.

There are diverse losses which people or businesses tin insure confronting:

■ theft - someone stealing their appurtenances or possessions

■ damage from fire or other natural disasters such every bit floods, earthquakes and hurricanes

If holding is stolen or damaged, the person or company who is insured makes a claim - requests compensation - from the insurer. The insurer will then indemnify or compensate them: that is, pay them an amount of money equivalent to the loss. As the number of natural disasters seems to exist increasing, so are the claims for harm to holding, and this will lead to higher insurance premiums.

In the past, many people buying insurance used independent brokers - people who searched for insurance at the lowest cost, or agents - people working for the insurance visitor. But similar retail banking, the insurance industry has changed in recent years. A lot of insurance is at present sold straight, by telephone or on the internet. This can be cheaper than insurance bought over the counter from a banker or an agent.

Life insurance and saving

Life insurance (as well chosen balls) will pay an agreed sum to someone else, for example your hubby or wife, if you lot die before a sure historic period. People too use life insurance policies as a manner to save for the future: you can buy a policy that pays a sure sum on a specific appointment, such as when you retire from work. Every bit with pension plans, life insurance policies are tax shelters, or a way of postponing payment of tax. You practice not take to pay income tax on life insurance premiums. Still a lump sum - a unmarried, large amount of coin paid out when an insurance policy matures - will exist taxable.

Insurance companies

Insurance companies take to invest the money they receive from premiums. Like pension funds, they are large institutional investors that invest huge sums in securities, peculiarly low-risk ones like government bonds.

The largest insurance market in the world is Lloyd's of London. This is an association of people chosen underwriters, who guarantee to indemnify other people's possible losses. Lloyd'south spreads risks amidst a number of syndicates: groups of wealthy individuals, commonly known every bit 'names'. These people tin earn a lot of money from insurance premiums if the clients never merits for bounty, but they also take unlimited liability or responsibility for losses.

If insurance companies consider that they have underwritten too many risks, they tin sell some of that hazard to a reinsurance company. This is a visitor that will receive some of the premium and too carry, or take, some of the take chances.

47.ane Consummate the crossword. Expect at A, B and C opposite to help you lot.

Across

ane and x across Some people purchase life

insurance that pays a.............................. on

retirement. (4,3)

four Many insurance companies at present sell , over the phone or the internet. (6)

8 I take a theft policy, so the insurance

visitor volition.................. me if my mobile

phone is stolen. (nine)

nine If yous make a large claim from your insurance company, the cost of your volition probably go up. (7)

10 Come across one across.

12 When I insured my firm, I used a.............

to observe me the best deal. (6)

13 Exporters have to insure goods in transit in instance somebody.................... them. (6)

fourteen I lost my job as an............ for an insurance

visitor when people stopped ownership over the counter. (5)

fifteen Lloyd's spreads the risks it insures among

................ fabricated up of groups of underwriters.

(10)

17 The private underwriters at Lloyd's are ordinarily called.................. (5)

xix Natural disasters are expensive for

insurance companies because they cause a lot of.......................... to buildings and their contents. (6)

Down

2 Lloyd'southward............... risks worth over £14 billion. (11)

iii Y'all should e'er read the small print - all the details -

............ (six)

5 There are............... companies that take on office of the risks

companies. (xi)

half dozen Life insurance can exist a taxation................. - a way of

putting off paying taxation till later. (7)

7 Most people insure their personal.................

against loss, burn and theft. (8)

eleven of London is the world'due south largest

insurance market place. (half-dozen)

Fortunately, I've never had a car accident, so

I've never had to.................. annihilation from the

insurance company. (five)

18 Life insurance is besides a style to............. money

and pay less taxation. (4)

before y'all take an insurance underwritten by smaller

"Hello, I'd like to apply for some holding insurance."

Over +o upu

How many different insurance policies do you or your family take? Are there whatever risks you cannot insure yourself against? What insurance does your company or employer have?