How to Choose a Boat Insurance Policy
If you are looking for insurance for your dinghy or yacht, there are several things to keep in mind: regulations and vocabulary of the insurance industries can be confusing to the novice. In this article, I give you a set of guidelines that you should make the choice easier.
Many insurance companies offer policies that are specifically designed for boat owners that are no professional sailors. However, the diversity and the competitiveness of the industry often make the whole business of finding an appropriate insurance a troublesome business.
The complicated nature of insurance policies is fueled by the fact that there is no single type of insurance that will cover every boat owner’s needs. The type of policy matching your individual requirements will hugely depend on your sailing habits. These are concerned with whether or not you race, have children aboard, and how high the safety standards on your boat are.
Generally speaking, it is not necessary to look out for insurance companies that specialize on marine insurance. However, the market is big and there are plenty of specialists around. Ask in your local sailing club for recommendations and talk to agents of different businesses; also look for friendly service and a good personal touch to the company. A lot of a good policy has to do with positive customer relationships. Beyond that, there is a whole lot of hard facts to check with every policy.
Guide to a Good-Deal Policy: Mix and Match
1.) A well-rounded insurance policy should have a third party liability that covers damages that you might cause on other sailboats. Look for how high the amount is that it covers and think if this is appropriate for the environment in which you sail.
2.) A potential hook is the “new for old” cover of your policy. Some arrangements will fully pay for a damaged piece of your boat – others might only pay the current, second-hand value of the damaged equipment. There might be specific regulations for different types of equipment.
3.) Look precisely for the kinds of damages that you policy will cover: it is dirty but not uncommon that vandalism, theft, transport damages and natural disasters (including hurricanes and other tropical storms as well as tsunamis!) are excluded from the cover. On the transport front: Check if the means of transport are covered, for example, your trailer.
4.) Ask the company if and to what degree guests sailing on your boat will be covered. There are policies that differentiate between passengers and crew, so not everybody aboard enjoys the same cover.
5.) Be careful with special deals that kick in only after the damage exceeds a certain amount – you know this kind of insurance policy from car rental services. You damage for example the hull and realize that the first 5.000 Dollars of repair costs are on your bill and only costs beyond that can be claimed from the insurance company.
6.) What is the policy going to cover if you sail in foreign countries? This is particularly important for cruisers, but even damages occurring in international waters might be effected by these regulations.
7.) Ask if your yacht will be covered if it is not sailing – this includes not only transport, but also times in which it is anchored, laid up and winterized, or in a dock. Some policies in areas with harsh climate might suspend the cover if a yacht is not winterized or exclude ice damages. Others have seasonal limits and might be a good deal if you sail only in the summer.
8.) Have a very close look at all items and equipment that will be covered by the policy. If this is very extensive, but you sail only a simple dinghy, it is likely that the policy will be too expensive for your needs. On the other hand, policies neglecting gear (which might include rigging and canvas, engines, and pricey electronic systems) might be useless for owners of luxury yachts.
9.) Does your policy offer legal protection? Similar to car accidents, boat collisions can leave people with injuries that allow them to claim compensation. Check to what extent such claims would be covered by your policy; depending on the country you live in, you might already have an insurance that offers thorough legal protection.
10.) How flexible is your insurance company when it comes to making “custom made” policies? You could work out a package that meets your personal needs and then ask several insurers how much they would charge for exactly this arrangement. This is a fairly secure way of comparing prices.