Your boat is a place of relaxation and tranquillity, so why would you want to stress out knowing that your pride and joy isn't covered against the worst?
Whether it's a fishing boat or a yacht, boat insurance can cover you for a bunch of things including liability, accidental damage, theft, natural disasters, and malicious damage, amongst others. It's a no-brainer, really.
Make sure your boat remains your happy place. Compare boat insurance policies below and learn what to look for in a policy, plus traps to avoid.
What you need to know about boat insurance
Depending on what level of cover you choose, boat insurance can protect you if you hurt someone or something with your boat and protect you if your boat or anything in it is damaged or stolen. It’s like merging your car’s CTP insurance with property insurance, only it’s not compulsory and it’s for a boat not a car.
You can get boat insurance for all sorts of watercraft including yachts, powerboats, sail boats, jetskis, dinghies and houseboats.
Here are the levels of cover you’ll find as you compare policies:
- Third-party property. This base-level policy only covers you if you damage someone else’s property. It doesn’t cover damage to your own boat.
- Third-party fire and theft. This adds to the protection above by giving you cover for injuries to others. You’re covered if your boat is stolen or gets lost/damaged in a fire or earthquake – but storms, floods and hail are not included.
- Comprehensive. This gives you complete cover by adding storms, floods and hail back into the mix.
What does boat insurance cover you for?
Here are a few situations you may be covered for, depending on your level of insurance:
- You crash your boat into someone’s dock. Your cover could pay to repair the dock and your boat (unless you were drinking or acting recklessly).
- Someone was standing on that dock and broke their leg. Your insurance could pay damages for the injury.
- The person on the dock decides to sue you. The right policy will help take care of your lawyer fees and any damages you end up owing the injured person.
- Someone steals your boat. If someone steals your boat, you may be able to get the full value back from your insurer.
- A few local ruffians spray paint your boat. The right policy will also cover vandalism.
- A flood overtakes your boat. A comprehensive policy will cover damage or loss from flood, fire, hail, explosion, lighting, impact and other natural events.
- You’re towing your boat and you damage it in a crash. The right policy will also cover your boat while it’s on the road, even if you damage it in an accident.
What additional cover options do I have?
In addition to basic cover, insurers offer a collection of other benefits that may be useful to you as a boat owner. Here are the most common:
- Contents cover. Your typical cover doesn’t protect your personal belongings. For an extra premium, you can get cover for personal items like clothing, fishing equipment, diving equipment, water sports equipment and electronics.
- Lay-up cover. If you store your boat during certain seasons, you may be able to save on premiums while it’s stored. With lay-up cover, you basically have two policies in one: one for the timeframe you’re using the boat and one for the timeframe you’re storing it. You’ll be charged a little more up front, but you’ll ultimately save on your premiums.
- Racing cover (sailboats only). Basic boat insurance doesn't cover you when you're racing. The sailboat racing option expands your cover to protect you when you're racing in an organised event.
- Water skiing liability. A basic boat insurance policy won't cover you if you're towing a water skier and that's what caused the damage or injury. With the water skier's liability option, you're covered for injuries to the water skier and for any damage caused to others as a result of this activity.
What types of boats can you get covered?
There are a lot of different types of boats, and they all have different insurance options. Here are a few of the most common:
- Yachts. These high-value boats get a lot of use and usually have a lot of luxuries on board. They'll often require a customised boat insurance policy. It’s possible that some very high value yachts are too expensive for normal insurers to cover.
- Powerboats. This is a broad category that includes many motorised boats including cruisers, runabouts and even some smaller yachts. Most boating enthusiasts will have a boat that falls into this category and will have plenty of boat insurance options.
- Sailboats. This also covers boats of many shapes, sizes and values. But one thing they do have in common is the sail. Owners won’t have a hard time finding someone to insure their sailboat, in fact this is the only type of boat insurers will offer racing insurance for.
- Personal watercraft (PWC). This category includes jetskis, aqua bikes and other small motorised vessels. They tend to be purely recreational, and are often owned alongside other boats. There’s a range of insurance options to cover PWC alone, but if you have other boats it can be a good idea to cover your PWC under the same policy.
- Dinghies. These are small boats including inflatables, rowboats and small sailboats. They are relatively fragile and unsuitable for use in bad weather, so it’s not really worth insuring these by themselves. Fortunately there are a lot of options for including them on insurance plans with other boats, or with home and contents insurance.
- House Boats. A special type of boat that you can live in. These have unique insurance requirements and their value can vary widely, so you may need to find a dedicated marine insurance company to find a policy shaped specifically to your needs.
What should you look out for when choosing your policy?
- Is your boat in insurable condition? Most policies will require that you have a "marine survey" done at your expense to show that the boat is seaworthy and in good working order.
- What value do you want insured? You've got three choices for insuring the value of your watercraft: agreed value, market value or a random value of your choosing:
- What parts of the boat do you want insured? Some policies allow you to choose which parts of the boat you want insured and for how much. For example, you may wish to reduce your premiums by insuring the hull but not the sail.
- How far can you take your boat from land? A common condition in most policies is a "geographical limit" of 200 nautical miles from Australia's shores. You're covered if you stay within that range, but not if you sail beyond it.
- What are the maintenance requirements? Your policy will require that you keep your boat and moorings in good working order. Find out if your insurer has specific requirements. For example, some insurers will require you to have your moorings serviced every year.
- Will you be towing your boat? If your boat is damaged while being transported on a trailer, it’s usually not covered by boat insurance so you'll need to add it to your car insurance. Boat insurance may still cover you for damage to others depending on how your policy is structured.
How much does boat insurance cost?
The cost of boat insurance will vary from person to person and boat to boat. When calculating your premiums, insurers will take the following into consideration:
- The type of boat you have
- What materials your boat is made out of
- Where you store/dock the boat
- Your boat's hull length
- How much you want to insure the boat for
- Your boat's maximum speed
- What cover options you want to add
- Whether or not the boat is paid off
The good news is, it's largely up to you how much or how little you want to spend, because you have the ability to add or remove options as well as choosing your own benefit amount.
How can you find cheap boat insurance?
You don’t necessarily want the cheapest policy around because you might end up with a dodgy policy that doesn’t protect you enough. However, you can save money on boat insurance by demonstrating that you’re a safe and effective boater. Here are some tips:
- Have a storm plan. Insurance companies appreciate someone who knows in advance how they'd stay safe and minimise damage in a storm. Some companies will give discounts to boaters who follow storm plans, while others won’t let you sign up without one.
- Keep to calm waters. If you're only going to be boating where the water is usually calm, bring that up to your insurer. They may offer to reduce your premium.
- Consider the seasons. Some seasons bring harsher weather, so you can save on your premiums if you avoid boating during those seasons. Store your boat when you’re not using it and save even more money with the lay-up option.
- Keep a clean sailing record. You can save on your premiums by demonstrating to insurers that you're a good driver, both on land and water.
- Store your boat when you're not using it. You can usually save on insurance if you store your boat in a garage as opposed to mooring it when you aren't using it. Plus you'll have the added benefit of reducing wear and tear. Storing it might not always make sense from a transportation perspective so make sure to weigh these savings against other costs you'll take on when storing your boat away from water.
How to compare boat insurance
When running your comparison, it’s important to consider more than just how cheap the policy is. Here are some other factors you should keep in mind:
- Decide what you really need. Maybe your boat isn’t worth a whole lot, and all you want is a policy that covers you in case you hurt someone else. Do the policies you’re considering offer this lower level of cover? If you need a higher level of cover, do they offer that?
- Do you need specialty cover? If you race your sailboat or take people water skiing, you’ll need additional cover. Do the policies you’re looking into offer it?
- Check the benefit limits and excess. You might find a few policies that are all around the same price. Check the benefit limits and excess to see if the policies really do compare.
- Review the exclusions and limitations. Do they policies you’re considering include limitations you couldn't live with? For example, most insurers only let you travel so far from the shore. Is that far enough for you?
What isn’t covered by your boat insurance?
Your insurer may not pay out if:
- You didn't secure your boat well enough. Most insurers require a minimum level of security. Boats on trailers are typically required to be stored in locked garages, or if in the open air (carports, etc), secured with approved anti-theft devices. Simple padlocks and chains usually do not meet security standards.
- You were using the boat recklessly or for unapproved activities. You won't be covered if you were breaking the law or using your boat in an unapproved fashion at the time of the accident. For example, you'll be denied if you were racing it at the time and you don't have the racing add-on.
- You sailed outside your geographical limits. Always know the geographic limits of your insurance policy. You risk having your claim denied if you go beyond this limit (unless a storm carried you out that far).
- You were towing your boat with your car. If you reverse into another car while towing your boat, your policy won’t cover damage to your boat unless clearly stated otherwise (although it may cover damage to the other person’s car, depending on the policy). Because it was on the road at the time, this is a matter for car insurance.
- You didn't maintain your boat well enough. If you haven't maintained your boat properly, an insurer may try to use this as a reason not to pay out.
- You used the boat when it was supposed to be stored. If you have lay-up cover and you use the boat during a time when you've agreed to store it, you won't be able to claim.
- Your boat was moored when it was not supposed to be. If your boat was registered as a trailer boat, but was moored at the time of the accident, the insurance company may refuse to pay out.
- You let someone else drive your boat. You're only eligible to claim if the person driving at the time of the accident is listed on the policy as an approved driver.
What are some common boat insurance mistakes?
- Forgetting to install safety features. If you don't take the proper safety and maintenance precautions, you could end up paying a higher premium, or worse yet, having your claim denied.
- Buying the cheapest policy. Choosing a basic policy or selecting lower benefit limits could leave you underinsured and cost you more in the long run if something happens to your boat.
- Adding your boat to your home or car insurance. In most cases, it’s much better to get a stand-alone policy for your boat because it will be much more tailored to boating-specific needs.
What other questions do you have about boat insurance?
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