Traders may use the flat rate of 1% for insurance to compute the Customs value of imports:
Definition of Cost and Freight incoterms
The Cost and Freight (CFR) incoterms means the seller (exporter) is responsible for obtaining customs clearance to export the goods, delivering the goods on board the vessel at the port of shipment and paying international freight charges.
The buyer assumes the ownership and risk of loss of the goods once the goods are on board the vessel. The buyer is responsible for purchasing insurance (if he wants), unloading the goods, clearing customs in the country of import, and paying for transport to deliver the goods to their final destination.