Boat insurance may not be a legal requirement in the UK, but it is pretty essential for any boat or yacht owner. The national trend among harbours, marinas and waterways authorities toward the stipulation of at least third party cover means that a yacht or boat insurance policy is no longer just a matter of common decency but also one of great practical benefit. If you are involved in organised events, or racing, it will also be a requirement, and these days most people will have some kind of insurance in place. Insurance will be one of the key things you will need to organise when buying a new boat.
I talked to a couple of the major boat insurers on the market; Craftinsure and Towergate and gleaned some useful advice.
It’s about much more than money
Your first step is to make sure you choose an insurer that is authorised and regulated by the Financial Services Authority. You can check this by visiting the FSA website. Check also that your insurer is a member of the British Marine Federation, as this tends to mean that you are dealing with a marine insurance specialist, with a policy that caters for boaters and staff who understand your questions and concerns. And if they are also members of the Financial Ombudsman Scheme, all the better. This means that you will enjoy the safety net of a free intermediary empowered to make a legally binding decision in the event of a dispute over a claim.
The Internet makes price comparisons very easy, but with insurance, as with all things, you tend to get what you pay for - so picking the cheapest quote is rarely the best option. Instead, you need to know that the policy suits your lifestyle and the particular kind of boat you own. Make sure any declarations you make are accurate (as they will form the basis of a binding contract between you and the insurer) and find out what is covered and what is excluded.
For instance, does the cruising area covered in the policy match your requirements? Standard cover is often for inland and coastal waters of the UK, so if you plan to go outside this area, you either need to change the terms and get a fresh quote or ensure that you will be able to extend your cover specifically for these one-off events.
A few more boat insurance questions to consider:
What about watersports?
What about towing?
What about racing?
What about overnighting on a cruiser?
What about other people driving your boat?
What about using your boat during the winter, when most recreational vessels are safely tucked away?
These are all questions that need to be actively addressed at the outset between you and your prospective insurer.
According to the Financial Services Agency (the insurer’s governing body), you are entitled to see a "Summary of Cover" and a sample policy before paying the premium or agreeing to an online quote - so make it count. Set aside a couple of hours and check it through thoroughly. If there are any limitations regarding region, range, time of year, equipment or usage that are likely to leave you without valid cover, then explain to the insurer what you need.
A boat insurance specialist will expect individual stipulations and is likely to offer sufficient flexibility to accommodate your requirements. If not, turn your attention to a different insurer - and only commit to a policy once you are entirely happy with the terms.
How you can reduce your boat insurance premium
Having established that a good boat insurance policy is more to do with suitability than simple economy, it is time to look at ways of trimming those costs. For a start, getting yourself some RYA-recognised qualifications can lower your premiums by up to 15 per cent. And if you keep your boat at a marina that operates a protected no claims agreement, you can expect anything up to an additional 20 per cent discount. Similarly, a boat kept ashore or in a secure Dry Stack facility may benefit from considerably reduced premiums.
As with any insurance policy, opting for a higher excess can also save you money. In fact, with some insurers, doubling the excess can save up to 20 per cent. And as regards the boat itself, insurers settle claims on the basis of its current market value, so find out exactly what that figure is and factor it into the negotiations. Think about the type, age and condition of the boat and the level of equipment on board - and be aware that overestimating the value will only increase your premium and generate issues if you ever come to claim.
Once the premium has been agreed, try to pay in one go, as monthly payments (and credit card payments) routinely incur substantial extra charges. Once the policy is in place, try to avoid unnecessary claims that will increase your premium. Check your boat over carefully and ensure she is well prepared for the new season (see 15 best boat fitting out tips) and make sure your security measures are up to scratch. Fit high quality locks to any engines or trailers and make a point of removing valuable accessories when the boat is left unattended.
Finally, if things change after you have bought your policy, then let your insurer know. A move in the mooring location, the acquisition of extra equipment or a change in usage could all have an impact on your premium. If you fail to keep your insurer up to date, you may find yourself paying more than you need or worse still, compromised in the event of a claim.
Top ten boat insurance tips
(1) Use the Internet for price comparisons, but try to pick a boat insurance specialist with membership of both the FSA and the Financial Ombudsman Scheme.
(2) If you plan to tow your boat, check the terms of your car insurance first (paying particular attention to any length restrictions).
(3) Get a Summary of Cover and check that its limitations encompass your intended usage. If they don’t, then address that with the insurer before you agree to the terms.
(4) If you’re a new boat owner, it pays to achieve a good level of competence through the completion of an RYA course.
(5) Avoid making unnecessary claims by getting your maintenance schedule and your security regime in good order.
(6) Know what you are expected to pay in the event of a claim and if necessary, consider increasing your excess to help reduce your premiums.
(7) Review your sum insured against current market values and make sure your policy keeps track of depreciation (particularly on outboard-powered boats).
(8) Keep your insurer fully up to date with any changes to your equipment or usage and if you want to go beyond your policy’s terms for a one-off trip or event, contact your insurer to arrange a policy extension.
(9) Just as you should check that the limits of your policy are not restrictive, you should also ensure that you are not paying for more than you need. If you only want basic third party insurance for occasional summer use of a low-value boat in a single cruising area, make sure you stipulate that.
(10) Shop around before your existing policy is due for renewal - because once you have renewed it, the cancellation charge may exceed any saving you would make by moving to another insurer.
What factors will reduce your insurance costs?
Valuation: One of the key factors in determining the cost of comprehensive boat insurance quotes is your stated boat value. Whilst you should not de-value your boat, overvaluing it will inevitably lead to higher insurance costs. Check the true market value of your boat.
Mooring: Certain moorings, like private marinas or mooring ashore are considered safer as statistically they are less likely to lead to a claim. Meanwhile adverse swing or tidal moorings are considered more risky.
Additional cover: Opting out of breakdown, legal or contents cover will lead to a lower boat insurance quote.
Water-skiing and water toys: RIB or speedboat owners are charged additionally for both the water-skiing option and the water toys option, so limiting to one will reduce your quote.
Boat age: Some boat types over a certain age can attract slightly higher quotations.
No claims bonus: Your Insurance Premium may be reduced if you don’t make any claims on it.
Understanding insurance terms
Third Party Liability: This covers the costs if you cause damage to another boat or worse still cause injury. The industry standard is £2,000,000, some insurers offer more.
Racing Risks: Some policies will provide cover for racing as standard, but some may charge you an additional premium.
New-For-Old Cover: This is a policy where your insurance will replace damaged items with new. Check your policy as some items over a certain age may be excluded.
Comprehensive Cover: This will provide cover for your boat against accidental damage, theft, fire and vandalism.
Public Liability: This is your ‘responsibility’ for the wellbeing of other members of the public and their property. In insurance, this refers to the cover given to compensate legal costs and compensation payments resulting from injuries or property damage to others, which was caused by you.
Excess: This is a payment you make towards a claim on your policy. You can sometimes opt for a higher or lower excess , a higher excess will often bring the cost of your premium down.
Market Value: The cost of replacing your yacht at its current value. This will take into consideration things like the model, the year it was built and wear and tear.
Insurance Premium: The cost of your insurance.
Boat insurance: our verdict
Effective boat insurance comes from treating your insurer like an ally rather than an unfortunate expense. Get actively involved at the negotiation stage (and keep your insurer in the loop regarding any new developments) and there is no reason why your relationship shouldn’t be a very long and harmonious one.