Compare Australian boat insurance policies to protect yourself from damage, theft and more
Boat insurance, just like car insurance, covers your boat in the event of damage, theft or any other unpredictable circumstance. It can cover:
- Fire, flood, storm or other weather events
- Theft or attempted theft
- Natural wear and tear
In addition to these some types of boat insurance will also cover:
- Death, injury or property damage caused by your boat
- Pollution by oil, fuel or other waste following an accident
- Towing, salvage and recovery costs associated with your vessel
Similar to car insurance, boat insurance also covers liability costs for damage caused by your boat to others, or your passengers’ injuries.
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Everything you need to know about boat insurance
Not all boats are covered. Motorised water vehicles such as fishing boats and yachts are included, but others like canoes and kayaks are not. Smaller motorised water vehicles like jetskis can be covered under your boat insurance by some policies. If you’d like to insure these, it’s usually more cost effective to include them in a larger boat’s insurance policy whenever possible.
How does boat insurance work?
The main purpose of boat insurance is to protect your boat from accidental damage, to cover third party damage to other vessels and to protect you and your passengers. Boat insurance can cover the costs of injuries incurred, including loss of income, anguish and legal fees, up to the maximum amount payable by that specific policy. This coverage applies to both you and any third parties involved.
Just like car insurance, boat insurance policies will only pay out if the person driving the vessel at the time of the accident is covered by that policy. But unlike car insurance, compulsory third party boat insurance is not a legal requirement in most places. It is included in almost all policies though. Given the risk of boating accidents and the potential for extreme costs incurred by injury or death, you should always make sure you get it.
- One of the most important things to consider is what you use the boat for. Fishing, racing, pleasure cruising and transport all pose different risks, which will affect the price and conditions of your insurance policy. Some types of cover can be extended to give protection for more than one use, as well as to cover possessions stored onboard.
What are the different types of boat insurance?
Typical boat insurance is structured in two parts: the basic coverage, and a number of additional options to fine-tune your policy.
Basic boat coverage consists of:
- Protecting the boat's value from fire, storm and flood, accidental damage, vandalism, etc.
- Theft or attempted theft.
- Liability cover for events like collision, and third party property damage or physical damage.
- Protection against uninsured boaters, in case of damage from another boat, jetski or aqua scooter. Even if the other boater has third party liability insurance, their policy might not be enough to cover all the damage, or might be invalid if, for example, the other boat driver was inebriated at the time.
When you get a quote from an insurance broker or agent, it’s generally for the basic coverage. From there you can ask for extras called optional or specialised coverage. These additions include things like:
- Contents: Covers all personal belongings on the boat. Check the terms carefully to know whether this covers theft, damage or anything else, and what conditions apply. Most policies will require your belongings to be stored in the locked cabin when the boat is unattended in order to cover theft, for instance.
- Total loss replacement: Your insured boat can be replaced with a brand new one of similar quality.
- Emergency towing: Towing service in case you need it.
- 24-hour assistance: If necessary, trailer and towing costs are covered.
- Wreckage removal costs: In case of an accident.
- Replacement cost of fishing equipment: Often more at risk of damage than the boat itself.
- Lay up: Insurance premium is reduced if the boat is put in storage and not used during a certain agreed-upon period of time.
- Racing (sailboat): Provides cover for loss or damage incurred while racing, particularly to sails, rigging and other vulnerable parts.
- Waterskiing or floatation devices: Provides liability cover if waterskiing or using floatation devices.
- Environmental damage: Covers costs associated with environmental damage caused by oil or other waste leaks after an accident.
- Trailer: Covers you boat trailer from damage, theft, vandalism, etc
How to compare boat insurance
When comparing boat insurance policies there are some factors you need to consider:
To find the policy that suits your requirements, carefully read through the terms and conditions to get a clear understanding of when you will actually receive payment for a claim and what exactly is covered. Each policy will have a set of exclusions that are important to review prior to application.
You must also consider whether the boat is insured at an agreed value, meaning the value agreed upon between the insurance company and yourself, or at the current market value, subject to depreciation.
Some policies allow you to insure only certain parts of the boat. For example, you may wish to reduce your premiums by insuring the hull but not the sail.
The premium depends on the kind of boat you need to insure, the engine, and the use of the boat (private, commercial, racing or business). It also depends on whether you have just the basic coverage, or if you have also purchased additional coverage. Each special condition will increase your total premium by a certain amount. Certain special conditions, such as wear and tear on high value vessels, will increase premiums more than others.
How easy are claims?
This depends on the quality of the insurance agent, broker or company. Ideally you need to make sure that any eventual damage will be covered by your insurance.
The most frequent boat insurance claims are the result of hitting an underwater object, theft, collision between boats and storm damage. As such, all of these are covered by basic policies.
Whenever possible, you should immediately file the claim to your insurance agent or broker and follow the required steps to receive reimbursement.
Where your boat is stored is important in determining the cost and the terms of the insurance policy. If you live inland you could store your boat in a shed and transport it from your home to the water. If you live in a coastal area, you could store your boat in a covered boathouse. If you keep your boat moored, it’s at risk of a range of other problems. If your boat is damaged while being transported on a trailer, it’s usually not covered by boat insurance, but instead by car insurance.
The location of the storage facility is an essential factor in calculating the insurance premium, and some boating facilities will require your vessel to be insured under certain conditions.
The different types of boat and their insurance
There are a lot of different types of boats, and they all have different insurance options.
- Yachts: Yachts are boats typically geared towards high performance, but in some locations any sailboat over a certain size limit is classified as a yacht. Due to their high value and more intensive use, yachts have fairly high insurance premiums. Many carry additional luxuries, so customised insurance policies are usually an effective way to protect these valuable assets.
- Personal Watercraft (PWC): This category includes jetskis, aquabikes and other small motorised vessels. They tend to be purely recreational, and are often owned alongside other boats. There are 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.
- House Boats: A special type of boat that needs a special type of insurance. Dedicated marine insurance companies are generally able to handle the unique requirements associated with these vessels, but they aren’t the only option. Their value varies widely, and the cost of insurance depends on a lot of different factors. It’s important that you’re intimately familiar with all the features of your houseboat before selecting a policy.
- Professional Vessels: Charter boats, guides, tour vessels, deep sea fishing, pro racing and more. If you depend on your boat for income, it’s exceptionally important that you have good insurance. Personal injury, damage and loss of income coverage is essential, as are most other benefits.
- Sailboats: A broad category that covers boats of many shapes, sizes and values. A good method of finding the right cover for your sailboat is to know exactly where, when and how you plan on using it, and then shopping around extensively.
- Dinghies: Small boats, often towed by larger vessels. This group includes inflatables, rowboats and small sailboats. Relatively fragile and unsuitable for use in bad weather, 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.
How do I reduce my boat insurance premiums?
Taking action to make yourself a safe and effective boater can pay off both in safety and cost.
- Have a storm plan. Knowing what to do in order to stay safe and minimise damage to the vessel if you get caught in a storm is important. By having a storm plan, sharing it with your insurance company and following it closely in the event of bad weather, you’re more likely to be able to claim on damages. Some companies will give discounts to boaters who follow storm plans, while others won’t let you sign up without one.
- Stick to safe locations. Conditions on the water vary widely depending on where you’re boating. If you only intend on going out in safe and calm locations it’s usually worth finding an insurance plan that recognises it.
- A good driving record, both in a car and on a boat, can reduce your insurance premiums.
- Restricting boating to certain seasons. Some seasons are more dangerous for boating than others. If you only intend to take to the water in summer, on clear days that aren’t too windy, then you can usually pay less for insurance than someone who wants to keep their options open in all weather. This is called a lay up period, and is a fairly common feature of marine insurance.
- Are you boating in fresh water or salt water? Salt water carries a lot of additional challenges and causes more wear and tear to your boat over time. An insurance policy for a boat that’s only used in fresh water should have lower premiums than an ocean vessel.
- Store your boat carefully. Leaving your boat moored day in and day out will cause it to degrade faster than a well-maintained boat stored in a shed or boathouse. You may wish to keep your boat in the garage to extend its lifespan and reduce insurance premiums. If you’re a long way from the water, however, the cost of boat trailer insurance will increase as a result of exposing your boat to more damage on the roads, and higher recovery expenses in the event of an accident. Regularly check for damage so it can be fixed before it gets worse, and when you store your boat away on dry land, always rinse it off.
When will boat insurance companies not pay out?
Your insurer may not pay out if:
- Your boat is improperly secured. 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 your boat in an unapproved fashion at the time of the accident. For example, if you were racing it at the time, your insurance policy must clearly cover racing.
- You were outside the approved areas. Always know the geographic limits of your insurance policy.
- Your boat was attached to a moving vehicle at the time.If you reverse into another car while towing your boat, for instance, your policy won’t cover it unless clearly stated otherwise. Because it was on the road at the time, this is a matter for car insurance.
- Your boat was improperly stored or maintained. 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. Similarly, an improperly maintained boat can be used as a reason for the insurance company not to pay out.
For a clear idea of what will and won’t be covered by your boat insurance, contact an insurance company representative for more information.
Advantages and downsides of boat insurance
- It’s useful against unexpected events or accidents, so you can enjoy your boating stress-free.
- It covers you even if the other boat or its owner is not insured.
- It can provide cover for total loss.
- You can decide the eventual value.
- It protects against potentially devastating liability costs.
- Depending on the type of boat and its use, policies can be quite expensive.
- Each policy will have its own set of exclusions, where costs cannot be claimed.
What are some common boat insurance mistakes?
- Forgetting to install safety features such as alarm systems and safety gear, as this could be used by the insurance company to reject your claim.
- Basing your decision on what cover to take out purely on price. Choosing a basic policy may leave you underinsured and forced to pay exorbitant excess charges in the event of a claim.
- Buying an "add-on" policy. Do not extend your home or car insurance to cover your boat. It is much better to get stand-alone coverage for your boat, as this will have better conditions. A possible, but rare, exception to this is companies that provide hefty discounts if you insure your boat with them as well as other possessions.
Your boat insurance questions answered
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