boat insurance

The basics of boat insurance

Insuring your boat is slightly more complicated than insuring your car or house, but many of the principles are the same. The cost depends of the variables including value, age, size, type of boat, where you’re going to sail it, and where it is now. In the same way that having a burglar alarm or immobiliser could reduce your car insurance premiums, some insurers may offer discounts for having attended safe boating courses. The overall premium will go up or down depending on the policy excess too.

As you would expect, there are different levels of insurance cover for your boat. Unlike car insurance, you’re not legally obliged to insure your boat unless you’re on an inland waterway if you have a powered boat or a houseboat. In these circumstances you must have third party for at least £1 million. Some unpowered boats also need insurance and you should check with your navigation authority for details. The cost of recovery of a wreck can run into hundreds of thousands of pounds and you are also liable for any environmental damage your boat might cause, so insurance really is essential. Liability insurance should cover all your legal obligations including legal defence.
Physical damage cover will generally cover all losses expect those covered by specific exclusions, and will not usually cover wear and tear. Do check that it covers the boat on land, and when on tow, if appropriate.

If you employ paid staff, or let the boat out for a fee you will need specialist commercial insurance, but for domestic and pleasure use your main concerns will be personal property and legal liabilities.

The type of boat you have will inform the kind of insurance you need. An important distinction is between Agreed Value and Actual Cash Value. Agreed Value is essentially new for old replacement. This means any losses are replaced at the full current cost. However, an economic alternative is to choose Actual Cash Value cover, which takes into account depreciation. Whilst this type of policy can help to keep down the costs of your boating, you can be left with a significant cost if you incur a loss and are only indemnified for the market value of the item. Take a look at online insurance websites for no-obligation free quotes for boat insurance, to get the best deal for you.
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