YOUR GUIDE TO MAKING BOAT INSURANCE PLAIN SAILING

Transcription

1 YOUR GUIDE TO MAKING BOAT INSURANCE PLAIN SAILING

2 When buying a boat there are many things to organise, often in very little time. Some insurance providers may recommend adding your yacht or boat to an existing car or home insurance policy to try and keep your insurance premiums down. Whilst this option may sound attractive, it s wise to check the fine print to make sure you re appropriately covered. As yachts and boats are a significant investment, owners may be better served with a dedicated yacht or boat insurance policy. We want to make arranging your boat insurance as straightforward as possible. That s why we have teamed up with experts Navigators & General, a leading yacht and motorboat insurer, to offer you advice and specialist protection for your valuable and treasured investment. Working with the experts at Navigators & General, we have produced this guide which provides advice for first-time boat owners about boat insurance requirements in the UK. Even if you re an experienced boat owner you may pick up some helpful tips to give you peace of mind. DO I NEED INSURANCE? Insurance is not actually a legal requirement in the UK, but if you are considering investing thousands of pounds in a boat it s wise to protect it. There are also many circumstances in which you ll need evidence of insurance for example, for marine finance, if you want to race or charter, or if you keep your boat in a marina, harbour or regulated lake. You ll also need insurance if you want to be granted an inland waterways boat licence. For those travelling further afield most European countries will require you to produce translated insurance certificates. Given the many situations in which insurance is now required, the cost of repairing any boats you may damage, and today s litigious society, we strongly recommend insuring your boat. Remember you can start your policy from the moment you have a financial interest in the boat, even if owners policies overlap. If the boat is being refitted or transported you may well wish to take out cover to protect you in case any insurance or haulier s limits of cover are inadequate. HOW MUCH DOES IT COST? Factors that affect your premium include the value, size, type and age of boat, and where you keep and use it. It s generally very easy to get a no obligation insurance quote to help you budget before you take the plunge and buy your new boat. You may be able to pay the premium by direct debit, which will spread the cost and reduce the risk of your policy lapsing unintentionally. This facility might incur a service fee. WHAT INFORMATION DO I NEED TO GET A QUOTE? Unfortunately, boat insurance isn t as straightforward as home or car insurance. As there is no MOT-type system available, insurers will need quite a bit of information to verify a boat s condition. Details commonly requested include: boat type boat age boat size construction material where you will keep your boat cruising limits uses of the boat (cruise, race or charter). If your boat is a motorboat the insurer will also want to know: fuel type horsepower speed.

3 The insurer will also want your own details including claims history and boating experience. Insurers will typically cover the boat for its current market value, normally the purchase price. If you vary this by more than 10%, Navigators and General, for example, may ask for an independent valuation. Likewise, if you are unsure of the age or type of boat, or it is over 20 years old, expect to be asked to produce a full out of water survey report by Yacht Designers & Surveyors Association (YDSA), Royal Institute of Naval Architects (RINA) or International Institute of Marine Surveyors (IIMS) certified surveyor before you are granted cover. Please make sure that any declarations you make are correct, as this will be the basis of a legally binding contract between you and your insurer. Deliberately withholding or misrepresenting information may invalidate your policy. WHAT SHOULD I BE LOOKING FOR? Open the back of a magazine, or surf the web and you will find a whole range of companies offering boat insurance. Picking the best company for you in terms of security, expertise and claims service is time well spent when you really need assistance or have to make a claim it will make all the difference. Like most things in life you get what you pay for and your insurer s security and ability to settle claims is fundamental. Make sure that you are insured with a well-established company. The size and length of time established is also a good indicator of the company s expertise in this specialist field. If the company is actively involved in boating events themselves, or is a member of the British Marine Federation, you are likely to find that they will understand your needs and problems better. When you get your policy, do take the time to scan through it. Use a highlighter pen to highlight any warranties, conditions or exclusions and make sure you study and understand them. Failing to do this could mean you unwittingly invalidate your policy. WHAT IS COVERED AND WHAT IS EXCLUDED? Boat insurance isn t quite the same as home or motor insurance, both in terms of what is covered and the types of policy. You can have an all risks wording, which is similar to comprehensive motor cover, or cover for specific perils only. A few companies offer third party only. The most basic element of cover that you should have is liability protection against third parties or passengers claiming for damage to them or their property arising out of your negligence. Navigators & General s standard level of liability protection is 3,000,000. The other main section to the policy is material damage to your boat and her gear and equipment. We ve listed on the next page the marine perils that boat insurance policies typically cover, as well as standard exclusions. There are of course many variations but this will give you a general idea of the scope of these policies. The summary of cover that accompanies policies will summarise the main covers and exclusions. The total amount that you insure your boat for should represent the market value of the vessel, her equipment, (that would normally be sold with the vessel) and your personal effects (that you would keep if sold). Policies are normally agreed value, which means that the value that insurers agree to insure would be the amount that you would expect to receive if the vessel is a total loss, so it s important to list everything.

4 A guide to cover and exclusions Boat insurance policies generally include: fire/explosion theft/attempted theft vandalism/piracy storm latent defects in equipment your negligence contact with third party objects frost damage. They don t usually include: wear and tear gradual breakdown corrosion or electrolysis deliberate acts of negligence or recklessness under the influence of alcohol or drugs. Breaches of policy warranties and conditions are also likely to invalidate claims. HANDY TIPS AND THINGS TO WATCH OUT FOR Don t forget that you can get a discount on your premium through no-claims bonuses on other boat policies and a higher excess can also help reduce a premium. A protected no-claims bonus is often available if you ask for it. A marina berth will typically get you a lower premium because of the improved shelter/security. If you have an agreed value policy, don t forget to review your boat s market value from time to time and inform your insurer if it is significantly over or under insured. If you can speak to a regular contact at your insurers do so it will help their understanding of your requirements and make it easier for all. Legal expenses cover can prove invaluable if you need to claim against a third party for uninsured losses. Ensure your personal effects are specified and that the sum insured amount is adequate. Navigators & General automatically cover personal effects up to 2% of the sum insured if your vessel has lockable accommodation maximum 2,500. Advise well in advance of any extended cruising plans or changes in use. It may take time to produce your required paperwork and you may even need to change companies if they can t accommodate your requirements. If you have a claim outside office hours, the best advice is never admit liability and take photos and immediate details of witnesses if any third parties are involved. Insurers should reimburse reasonable costs incurred in minimising further losses. USEFUL ORGANISATIONS FSA Financial Services Authority BMF British Marine Federation RYA Royal Yachting Association YDSA Yacht Designers & Surveyors Association RINA Royal Institution of Naval Architects IIMS International Institute of Marine Surveyors

5 A WEALTH OF EXPERIENCE TO ASSIST YOU Since 1921, Navigators & General has been insuring pleasurecraft, from dinghies to superyachts. Marsh Private Clients is part of Marsh, a global leader in insurance broking and risk management. Visit to obtain your quote and cover from Navigators & General. The information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. Navigators & General is a trading name of Zurich Insurance plc. Zurich Insurance plc is authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Services Authority. Marsh Ltd. is authorised and regulated by the Financial Services Authority for insurance mediation activities only. Copyright 2012 Marsh Ltd. All rights reserved.