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.
Premiums are calculated based on many factors like the overall value of the vessel which includes hull and machinery.
Other information is also considered, particularly the type of boat you are asking to insure, the location of the boat, area of operation and activities you plan on doing. Other considerations are assessed more frequently today, like how much boating experience you have and if you require any additional requirements like water skiers coverage or adjustment to the level of legal liability cover.
Insurance premium quotes vary, but we typically see annual premium pricing for the smallest trailer boats ranging from around $220.00 per year, and up to many thousands of dollars for large motor yachts, depending on the level of coverage required.
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
If you hold an Agreed Value policy, the underwriters will determine the ‘sum insured’ value before the policy begins and written as ‘agreed’ on any published certificate of currency.
In some cases the marine insurance underwriters may ask to review a recent boat valuation, to assist them in confirming the understanding of value. In these cases – Registered boat dealers or boat brokers whom specialise in the type of vessel being insured, will commonly be able to provide these valuations and are to be written on their business letterheads.
Market Value policies determine the claim value at the ‘time of loss’ by utilising industry publications and valuations from dealers or repairers. 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.
Note: The total potential claim amount cannot exceed the sum insured limit, as specified 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. You can easily add an additional fee for this extension, onto your policy in many cases.
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: During the nominated lay-up months, you may need to store these boats and PWCs securely off the street within your private residence and refrain from using them on the water or for transit.
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.
Before securing insurance coverage, it’s advisable to inquire directly with the insurer about whether survey reports are necessary.
Usually, a registered and qualified shipwright or marine surveyor will need to complete an out-of-water survey or condition report for your vessel.
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. Standard policies typically don’t cover everyday wear and tear, hull deterioration, corrosion, rust, electrolysis, or osmosis.
We hope these responses to commonly asked questions have helped you understand boat insurance a little better. Safe Boating everyone.
