Boat Insurance

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Boat Insurance

YOUR GUIDE TO BOAT COVER

A great number of people look at a boating lifestyle and decide to jump in and buy a boat. It could be a family new to boating, upgrading from a runabout to a moored cruiser or fulfilling a lifelong dream to own a yacht and sail north. Buying a boat or upgrading to a bigger boat is exciting and sometimes organising insurance is an afterthought. Many boat owners say finding an insurer, let alone finding the right insurer is hard when it should be easy. Insurance is just insurance, right? Not always writes AEI Marine Insurance Broker COREY YEUNG.

Insurers have a set of rules that determine whether they will insure you and your boat. It is important to understand that an insurer will separately assess you and your boat. They will combine these parts and then decide if they will ultimately offer you insurance.

Most insurers ask a series of questions about you and your boat and while this works for the majority, it doesn’t always paint the true picture of the boat you are trying to insure.

ASSESSING YOU

Insurers look at your boating background and experience. Have you owned boats previously, and if so, what types of boats did you own? Some insurers will not provide cover if you have never owned a boat or if they think you do not have the experience to handle the size of boat that you are trying to insure.

Boating experience and boat ownership is important as insurers want to be confident that you will avoid the avoidable incidents. Most boat claims in Australia are for impact damage, that is, boats hitting things. Such as running aground, bumping into jetties or wharves, a collision with another boat. Even low speed incidents can result in $‘000 in repair costs.

If you are new to boating or transitioning into a larger boat, you should invest in your boating knowledge. Arrange to undergo a skipper course or ask your local boat broker or dealer to help you through the early stages of controlling and getting to know your boat.

If your insurer determines that you lack the required experience before they can offer cover. Ask them:

  1. What skills do you need for the boat you are insuring?
  2. Can they recommend anyone to help you learn the skills to handle your boat?
  3. Can they increase the claims excess until you gain the necessary experience?

ASSESSING YOUR BOAT

Sometimes insurers may assess you as a good risk, but determine your boat is a high risk. What can you do to make your boat more ‘insurable’?

Insurer claims data:
  • Older boats have a higher claim frequency than newer boats
  • Boats on a swing mooring generally have more claims than boats berth in a marina.
Although these are just statistics, an insurer uses this information to help navigate which boats to insure and which ones to avoid. While not all of us can afford a new boat or berth in a marina, we can take steps to make our boat more attractive to insurers.

Location Location Location:
There are some geographic locations that insurers will just not insure. Most commonly boat owner’s link this to far northern Australia because of the cyclone threat, but there are a number of mooring locations that insurers avoid due to historical severe weather events.

  • If an insurer determines that they will not provide cover for a swing mooring due to the location, it is unlikely that they will change their decision.

Maintenance:
Insurers like boats to be serviced regularly. Insurers consider ‘regular’ as being annual servicing.

  • Where possible use a local shipyard and marine mechanic.
  • Develop a relationship with your marine professional (your insurer may know them!)
  • If you do own maintenance, keep the invoices for the parts that you buy.
Out of Water Survey:
When buying a boat, engage a qualified surveyor, shipwright or naval architect to conduct an Out of Water Survey and some insurers provide a list of surveyors. The best surveyors will report on all aspects of the boat and include images of your boat in their report. It is also recommended that the engine(s) are inspected and tested by a qualified marine mechanic. A relationship with a trusted surveyor and marine mechanic can be invaluable.

An Out of Water Survey will be required:

  • When the boat reaches a specific age (usually at year 15 but can be at year 10).
  • Every 4-5 years thereafter.
  • When you buy your boat and go to insure it for the first time.

Rig check and rig replacement:
The rig should be replaced once it reaches year 10 even if you haven’t been sailing regularly.

  • If you don’t have a rig report, an insurer may opt to cover the hull and engine but exclude the mast and rigging.

Swing Mooring:
Swing moorings require to be serviced annually by a qualified mooring contractor. An insurer may void a claim if you cannot provide evidence of annual servicing for your swing mooring.

  • Insurers require a copy of the servicing invoice, so make sure you send them a copy.

LOYALTY IS IMPORTANT

Insurers take notice if you swap and change each year. It is recommended to monitor how competitive insurers are each year, but it is also important to understand if they consider you and your boat as a potential high risk. Sometimes insurers will offer cover on a high risk because of your loyalty.

A good risk will always find an insurer, but this can change as your boats get older or if you have a claim. Keep an open mind and look beyond price.

Having the right insurer is better than having the wrong insurer that has the right price.

Remember:

  • Insurers assesses you and your boat separately.
  • A well-maintained boat is one that is serviced annually.
  • Out of Water Surveys are required at year 10 and every 5 years thereafter.
  • Establish relationships with qualified marine professionals.

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