Boat insurance is something you will need to arrange when buying a boat. While the UK does not have legal requirements for boat owners to have insurance, there are many waterways authorities and marinas which will stipulate at least third party liability.
Marine mortgage companies will also make this a requirement of lending. And, let’s be honest, insuring your beloved and costly asset is just plain good sense. So how do you go about sifting through the myriad insurance options to get the right cover for your boat?
Choosing an insurer
As with cars and houses, there are hundreds of marine insurance companies to choose from. The internet makes comparing policies easy, but don’t get fixated on the final price as there are a lot more factors to take into consideration and the cheapest cover won’t necessarily be the right one. A good rule of thumb is to identify the most expensive components of your boat and check the policy includes cover for damage to these. As we will see, there are exclusions to most policies and it’s imperative to know what they are. Ensure that the insurer you select is registered with the Financial Services Authority, the British Marine Federation and ideally the Financial Ombudsman Scheme.
What is included in boat insurance cover?
The question is akin to ‘how long is a piece of string?’, for each policy is different and tailored to a specific boat, its location, cruising grounds, owner’s experience level and technology/possessions on board. All policies will cover you for at least third party liability damage, while more comprehensive ones will cover against theft, bodily injury, sinking, fire damage, collisions and stranding. Most comprehensive policies will include equipment such as the engine, hull, sails, furnishings and machinery.
When researching boat insurance, be equipped with questions to ask the insurer, or to look for in the detailed wording of the policies terms and conditions. For example, will you need to get a condition survey completed first (see our guide to surveys)? On boats older than 10 years, this would be likely. Does the policy have a ‘New for Old’ deduction? Indeed, when making a claim can the insurer choose to replace parts, or the boat, with those of a similar age and condition? Which parts or equipment are subject to deductions due to their condition or age when making a claim? Is use of the vessel restricted in any way, for example single handed sailing or night sailing?
If we’re going to discuss what is included, it would be prudent at this stage to mention what might not be included in a policy. Typical exclusions include damage caused by wear and tear, wilful misconduct, depreciation of value due to age, any loss caused by rust, and mast and sails if the boat was racing. It is also important to read the fine print carefully and know whether specific anti-theft devices or fire safety equipment are required in order to comply with the policy.
What can affect the premium? No claims bonuses and excess options
As we have seen, every boat attracts its own risk levels and therefore policies are dependent on many factors. Ultimately, it isn’t just the size of your boat which will determine how much you pay for insurance, but where it is kept, where it is sailed, how easy it is to be stolen, local weather conditions, and the potential for damage. For example, the premium for keeping your boat in a marina will be considerably different than if it was kept on your driveway. The use of the boat will also affect premiums, with boats that are chartered or raced incurring higher insurance costs than those enjoyed for private use.
It is vital you provide the insurer with all the information necessary when applying for a quote. For example, if you plan to cross the channel and spend summers cruising French waters then you will need to be upfront about this otherwise your cover may not extend outside of UK waters and you wouldn’t be covered. Likewise, once you have a cover in place, you will need to notify your insurer should any circumstances change or you make improvements to the boat.
As with other types of insurance policies, the excess that you pay when making a claim can have a significant impact on the overall cost. Pay a higher excess and the premium goes down. No claims bonuses can also significantly impact the premium, although it’s important to find out whether it is protected and, if you have a claim, what effect it will have on your no claims bonus the following year.
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