In this day and age of 'claim culture,' with everyone out for everything they can get, it couldn't be more important to make sure you have the appropriate insurance cover for your boat. There are a range of policies available from a wide selection of brokers, though not all of them may suit your specific needs. So, here is the MainSail guide to boat insurance to give you some advice on what to look out for.
How you use your boat will determine what type of coverage you require. For example, if you just use your boat for cruising with your family, you will require a very different policy to someone who concentrates on racing. Remember, a good insurer will always cater for your needs, so don't settle for second best.
The first step towards getting insured is determining what cover you actually need:
General cover
- Liability for damage or injury to other people or vessels for which you may be held legally liable
- Medical payments for those injured while boarding, leaving or aboard your boat
- Damage to your craft and related equipment
- Medical expenses for towed water-skiers
- Wreck removal
Optional cover
These are options that don't usually come as standard and you may have to specify you require them before agreeing to a policy:
- Damage in hauling or launching
- Loss of motor overboard
- Fire, lightening, explosion
- Sinking and stranding
- Underwater damage
- Theft
- Damage while in transit (although this may be covered by your motor insurance)
- Marine legal expenses
- Environmental hazards originating from your vessel (such as oil spills)
- Emergency towing
- Trolley or trailer cover
- Damage by vermin
- Damage caused by uninsured vessels
Commercial boat cover
You will need commercial boat cover if you own boat dealerships, recreational marinas or yacht clubs or if you offer watercraft rental, fishing and hunting guides, charters and/or bareboat charters. (You must remember that some companies will consider occasional corporate entertainment, or use of your vessel when you are not aboard, as commercial.) This type of cover includes:
- Commercial Property
- Yacht Dealers' Coverage
- Protection and Indemnity
- Marina Operators' Legal Liability
- Bumbershoot/Umbrella
- Workers' Compensation
- Coverage for tools and equipment
- Piers, wharves and docks
Another point that will need to be clarified with your broker is your cruising range. Most policies are restrictive and you will need to declare any venture outside British coastal waters, but it is also possible to find specific policies to cater for trips further afield. Most will cover you around Europe for a premium, but you may need to hunt down a specialised policy that applies to longer offshore trips such as Atlantic crossings. It is unlikely that you'll be able to get cover for areas such as the coastline of Somalia and some parts of the Caribbean due to high nautical crime rates and piracy in the area.
As with car insurance there are a few different types you can choose from:
- Third Party Liability - This will cover you for any damage that may occur to others which you are liable for, whether it be damaging another vessel or any other property that does not belong to you. This also covers you for injury to others including loss of life. This usually covers you for damages up to £2,000,000.
- Comprehensive Cover - Just like your car insurance, this will provide cover for accidental damage, theft, fire and vandalism, although you will need to check the conditions surrounding the policy.
- New-For-Old cover - Depending on the policy, any item that is damaged will be replaced with a new one. You may find that to have this cover you will need to pay a certain amount of excess and there may also be an age limit on the items that need replacing. Basically, if you have had an item for a few years, instead of getting it replaced by a similar, but new, item, you will only be given the market value and have to pay the rest yourself.
- Racing Risks - You will need this cover if you wish to compete in your vessel. As there will be a much higher concentration of boats around you when racing, there is more chance of damage occurring. Some companies have this as part of their standard package, but it is worth checking before you sign on the dotted line.
When deciding which insurance company you should use, the best bit of advice is to ask other people what they use. Your friends are more likely to give you an unbiased account of their insurance broker than a sales man on the other end of the phone. Their advice can prove invaluable. It is also advisable to go for a company that you have heard of before. Some smaller obscure companies do offer cheaper prices, but you are unlikely to know how reputable they are. By law, all insurance brokers must be regulated by the Financial Services Authority. If you are unsure, there are websites such as www.fsa.gov.uk/register which can tell you more about the company and display previous customer ratings.
It is possible to have your boat insured under your homeowner's policy, but this will often not cover you for marine specific risks, such as running aground or wreck removal. Claims can also be limited to 10% of the value of your home. It is worth checking if your car, home, etc. brokers offer a separate marine insurance policy as you may be able to arrange a special deal as an existing customer of theirs. Most high street insurers will be able to offer you some sort of marine deal, but they may have little experience in this area, resulting in complications when it comes to claims.
Calculating a quote
There are a number of factors that will be taken into account when calculating your quote:
- Experience on the water
- Where you will be sailing
- Onboard equipment
- Previous insurance claims
- Value of the boat
- Boat make and model
- Age of the boat
- Any previous driving convictions may be taken into account
If you are going to be the only person using the vessel in a cruising capacity, your quote should be fairly reasonable. Discounts can be awarded if you have recognised sailing qualifications, and some companies will even insist on you taking some kind of instruction. Theft deterrent products such as a burglar alarm and installed safety equipment on your vessel can also result in a cheaper premium.
You will have two options when choosing the type of cover you want - an Agreed Value Policy (AVP) and an Actual Cash Value (ACV). An AVP is when you and the insurer agree on the value of the boat and so, when you come to making a claim, you will receive the set amount. This will tend to mean you have to pay more upfront, but it covers you for depreciation. If you decide to go with a cheaper ACV policy, the pay out amount will be determined by what your boat is worth at the time of the claim. You can fight for more money if you feel the payout isn't correct, but this can just slow the claiming process down and doesn't always result in more money.
Claims
If you do unfortunately have to make a claim make sure you report the incident as soon as possible - both to your insurer and the police, where necessary, as you will need to have a crime reference number if you have been victim to criminal damage. You will either be asked to have a written quote for repairs and replacements or they may wish to inspect the vessel themselves, and in some cases both.
Accidents on the water can happen to anyone, no matter how much of an experienced sailor they are, so make sure you aren't left footing a huge bill by getting the right insurance for your vessel. Safe sailing.
Resources:
"A Guide to Insuring Your Sailing Dinghy" by Patrick Altoft
www.noblemarine.co.uk
