News & Resources

Keeping you informed is part of our mission.

Titanic sinks! Insurance claims mount for passengers, cargo

Thu Apr 12th, 2012 on     Insurance Claims,    

When the Costa Concordia foundered in January, insurance industry insiders thought the cruise line’s Florida-based parent company would avoid insurance and legal liability. It seemed that, with their ticket purchase, passengers agreed to pursue legal actions through the Italian courts. The venue for insurance claim disputes has been a source of contention.

A century ago, when the RMS Titanic went down, things were a little different — simpler in some ways, more difficult in others. The shipping and passenger cruise industries have changed a great deal since, and in a large part because of the loss of Titanic.

We’ll discuss some of the risk management developments in a future post; in this post, we want to focus on the insurance claims. It’s interesting to note, though, that Titanic was the biggest maritime insurance loss to date in 1912, and experts estimate that Concordia will be the biggest maritime loss in history.

The circumstances were different from the Costa Concordia. Titanic was not just a passenger ship; she was carrying cargo. And, she was gone; recovery of personal property and cargo was not a possibility. Similar to the Concordia, though, not all bodies of the passengers and crew members who died could be recovered.

An article in the New York Times from April 28, 1912 — less than two weeks after the ship went down — talks about insurance issues and claims processing for Titanic. What is most startling is that almost every insurance obligation tied to the disaster had been met. Two weeks after the Concordia accident, insurance professionals were still guessing at the total losses.

According to the article, property losses came to $9.42 million: $8 million for the ship, $420,000 for cargo and $1 million for personal property. Coverage limits applied, of course, reducing the payout to $6 million in all. Cargo policies covered almost the total loss (95 percent): Payout was $400,000. Personal effects were covered at 60 percent ($600,000). The White Star Line took a serious loss: Payout for Titanic herself was $3 million, a little more than 35 percent of her value.

Life insurance was more complicated than property insurance, because of the number of lives lost (1,635) and the number of insurance companies involved (almost 120). We’ll go into that in our next post.


Reuters, “Costa Concordia likely worst maritime insurance loss,” Myles Neligan and Ben Berkowitz, Jan. 16, 2012

New York Times, “Titanic insurance claims quickly met,” April 28, 1912

Super Lawyers
Florida Legal Elite
Top Lawyer - South Florida Legal Guide
Association of Corporate Counsel - South Florida Chapter
Back to top