Boat Insurance Quotes has teamed up with some of the leading insurance experts in Australia, with the aim to clearly explain some of the more commonly used marine insurance terms and boat insurance definitions, so that you can make some more informed enquiries. It is important for you to understand what things your boat insurance policy can cover you for.
Important Note – you must read and understand each Product disclosure statement (PDS) and Financial services guide (FSG), which will be supplied by your agent or broker, so that you can properly understand what inclusions and exclusions are noted in you individual policy as they differ from insurer to insurer.
When selecting marine insurance coverage, you have a few options available to you as the boat owner:
Comprehensive Marine Insurance – This includes cover for Accidental loss or Damage to your boat, along with the possible third party legal liability arising from the use of boat. Common insurance claims can be from fire damage, storm damage, theft, impact or sinking.
In the event of a Total Loss or partial component loss of the vessel, insurers have some options to either:
Replace or Repair the Boat or lost/damaged parts of the vessel affected
Pay the insured reasonable costs of repairing or replacing the boat or insured components
Pay the insured either the Market Value of the Boat or Agreed Value of the Boat
Generally if you have an Agreed Value policy, the value is determined at the time of the acceptance of the boat valuation (ie before the policy starts) These valuations are commonly provided from a known and registered boat dealer or boat broker who deals in the type of vessel that is trying to be insured.
Market Value policies are determined at the time of loss through means of industry publications and dealer or repairer valuations. Insurers will take into account the boat’s condition and location. The actual amount paid may therefore be less than the limit shown on the policy schedule in some cases.
The total potential claim amount will not be higher than the sum insured limit, which is noted on the boat insurance policy. So it is prudent to understand the value of your vessel. If you have any doubt about how much could you reasonably expect to sell your boat for in the market-place, you should contact your local boat dealer or broker and arrange for a boat valuation.
Third Party Only, Legal Liability Cover – Third party only policies cover you for Your legal liability for injury to other people, or damage to their property when using your own boat.
Within Australia there is a common requirement to have at least $10 million dollars worth of legal liability cover if you wish to berth your vessel at a marina complex. Marina operators will often request proof of this insurance in the form of a certificate of currency, which can be provided by your boat insurance agency or broker.
Commercial Boat Insurance – Remember, if there is any type of money or reward exchanged directly or indirectly for use of your boat, it will make a normal pleasure-craft insurance policy invalid. You would need to source a different type of boat insurance coverage in the form of a commercial boat insurance policy. Your marine insurance agent or broker can assist you with this specific type of insurance product.
What about Wakeboarding and water skiing liability cover? You will need to confirm with your insurance agent to see if your current quote or policy includes water skiing liability cover. It is often an additional fee that can easily be added onto your policy.
Equipment and accessories coverage? There is usually some amount of fishing gear, diving equipment and water ski equipment coverage within leading marine insurance policies. There is often limits per item and total limits that apply. Check with your agency to determine if your policy covers you for equipment damage or loss.
What is Lay-up cover? This mostly applies for trailer boats and jet skis. You have the option to nominate specific months through-out the year when you don’t use your boat, ie… the winter months where you can save money during the periods of in-activity.
Note: There can be a requirement that these boats and pwc’s must be stored within your private residence, parked securely ‘off’ street and not be used on the water or transited during the lay-up months nominated.
Sailing / Yacht Cruising Cover? There is often limits to where and how far off the coast you can sail to, along with limits on cruising to certain latitudes within specific months of the year, due to risk of cyclone activity in the north of the country. Further to this – Blue water cruising cover is the term for international yacht cruising coverage for vessels that wish to visits other countries.
There are a few select insurers that cater to cruising ‘yachties’ that require specific international blue water cruising cover.
Boat Insurance in Australia without a Survey? It is possible to insure a boat without a survey in Australia, however there are generally guidelines within the industry. It is best to ask the insurer up-front to see if survey reports are required prior to establishing insurance coverage.
If your vessel requires an out of water survey or condition report, generally it will need to be completed by a registered and qualified shipwright or marine surveyor. The survey should be recently completed and able to be reviewed and accepted by the insurer before cover can be applied. This process of reviewing a surveyor’s report can take a few days to complete and is not a quick process, so leave plenty of time to arrange your insurance application.
Important Reminders: It is also a general requirement that you maintain your boat in good order and in a proper state of seaworthiness at all times and must abide with local compliance and regulations, including all safety equipment. Also, every day wear and tear, hull deterioration, corrosion, rust, electrolysis or osmosis is not usually covered within standard policies.
We hope these responses to commonly asked questions have helped you understand boat insurance a little better. Safe Boating everyone.