Strait of Hormuz Hull War Rates Fall to 1-3 Percent but 1,150 Vessels Remain Stranded

Tehran blockaded the Strait of Hormuz on February 28 in response to strikes by the United States and Israel. Insurance premiums for transiting the strait rose immediately to as high as 10 percent of a vessel’s value from 0.25 to 0.5 percent before the war, Cnn reported. Hull war rates have since fallen to 1-3 percent of a vessel’s value.

Some underwriters now offer no-claims bonuses that return half the premium to ship owners if vessels transit without incident. War insurance policies are priced six hours ahead of the voyage and remain valid for three to seven days before renegotiation.

Navy guidance and bound the policy that afternoon with the vessel due to enter the strait within six minutes. Smith and three brokers placed the certificate of insurance on the vessel’s command deck in ten minutes. At least 14 seafarers have been killed since the conflict began, according to the International Maritime Organization.

No vessels recorded in this year’s Loss Book have been destroyed, though more than 50 ships have been attacked in the strait, many insured in the London market. Around 1,150 cargo-carrying vessels with an estimated vessel and cargo value of $125 billion remain stranded in the Persian Gulf, according to Allianz last month.

Lloyd’s of London insured the Titanic for £1 million in 1912, equivalent to approximately £101.6 million today, and has recorded marine losses since 1774 in handwritten Loss Books using a swan’s quill pen.

The Lutine Bell, salvaged in 1858, is now rung only for ceremonial purposes. Western insurance companies will refuse to cover ships that pay fees to sanctioned entities, which includes several key Iranian institutions. Insurance premium rates are unlikely to return to pre-war levels in the short-to-medium term, said Ben Stone, head of marine hull at insurance broker Aon.