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Insuring your boat

When you are thinking about buying a yacht - don't forget about insurance!

The types of insurance cover available will depend on the use to which you intend to put the boat. If you intend to use it only for personal use then the cost should be reasonable. The estimate we received for a yacht with a purchase price of about 40,000 pounds was about 400 pounds.

Be careful if you intend to use the boat for commercial purposes, whether for charter or even semi-formal client entertainment. Most insurance companies will class this as commercial use and the cover will vary and be more expensive. Even if you are looking at occasional corporate entertainment you should still check with your broker to make sure that you are covered. The last thing you want is a client having an accident, and you not being insured!

You also have to be careful about your cruising range. If you are going outside coastal waters you will need to declare this, and insurance policies will usually be restricted in relation to range.

Not as exciting as buying the boat, but important!

We looked at a range of insurers, including Admiral and Noble Marine. Most were in much the same range when it came to cost, with all asking similar questions. In the end we went for Noble Marine. The main reasons we went for them were: (1) cost; (2) history; and (3) coverage. They were not quite the cheapest, but it was close. The difference was not enough to make it worthwhile switching to someone we did not know. The second reason was that we had in the past insured our dinghies with them. They always seemed to be sensible, and service was very good, dealing effectively with a number of small claims over the years. Finally they offered automatic racing risks coverage. That reflects an understanding of what most people use their boat for - family sailing and club racing.

New for old cover on spars and sails
Full racing risk cover www.noblemarine.co.uk

The following guide is courtesy of Noble Marine:

If you require yacht insurance, but have been presented with a number of alternative policy wordings from a variety of companies, Noble Marine's Guide to yacht insurance may help you decide the sort of policy you need.

Both the cover provided by different yacht insurance companies and the service they offer, can vary greatly. Bear in mind that a cheaper policy may end up costing you more, if you have to make a claim and you should always check what cover is being offered before signing up.

Q. What should I look out for?

A. Everyone's needs are different, and only you can decide if wider cover is important to you. It is essential though, to understand what is being offered to you, before being able to make an informed decision.

Comprehensive Cover

Will provide cover for your boat against accidental damage, theft, fire and vandalism.

Third Party Liability

You should not consider going afloat without liability insurance, which will cover you if you cause damage to another boat or worse still cause injury.

Racing Risks

A few yacht insurance policies will automatically cover racing risks for all sailing yachts, but some insurers may charge you an additional premium. This additional premium is usually calculated against the replacement value of the boat's mast, spars and sails. You must be careful when specifying this amount, too high and the premium charged will increase, too low and you may not be adequately covered in the event of a claim.

New-For-Old cover

This will replace damaged items with new, however age limits may apply.

Policy Excess

You will be required to pay the first x of any claim.

Laid up Period

Do your insurers restrict cover by insisting that your boat is laid up ashore between certain dates?

Q. Do I need to use a specialist marine or yacht insurance company?

A. No - Many High Street Insurance Brokers will be able to arrange your yacht insurance, but they may not have the necessary expertise to advise you correctly.

Q. How can I be sure the insurance company I choose is reliable?

A. Your policy is only as good as the service you receive if you have to submit a claim. Why not speak to your fellow sailors, for their comments regarding which insurers provide good (or bad) service to their clients.

A small number of yacht insurance companies are based overseas and it would be wise to establish that the insurers are based in the UK where you will have access to UK Law and compensation should a serious problem occur with your policy.

With effect from 14th January 2005, it is a legal requirement that any UK company providing an insurance policy, must be authorised and regulated by the Financial Services Authority (FSA).

A firm should clearly display their status on any documentation, including their web site. If you are in any doubt, have a look at the FSA's Register of Firms.

Q. Why do I need third party cover?

A. 2,000,000 Third Party Liability is usually compulsory if you are to sail in the UK and you should not consider sailing without this cover as a minimum. A policy providing third party liability should cover you if you were to cause damage to property or injury to another person, with your yacht.

The industry standard provides a limit of 2,000,000 and should be sufficient to sail in the UK. Marine Law limits the maximum payable on navigable waters.

Third party risks whilst in transit would be EXCLUDED as this is normally covered by your motor insurance policy.

Q. Should I expect a standard policy to cover me while I'm not sailing (i.e. when my boat is ashore or while I'm travelling?)

A. Comprehensive policies should cover your boat against accidental damage, theft, fire and vandalism, whether in use or not; however there may be restrictions on your policy. There may be restrictions on where your yacht should be moored, and when she should be taken ashore. These details should be listed on your policy.

Transit cover will be provided for smaller yachts towed behind your car, however there will be restrictions on larger boats (typically those longer than 9m) and those boats being transported by professional hauliers. Third party liability whilst in transit will be excluded, as this will be covered by the vehicle's insurance.

Q. Am I covered to sail for 12 months of the year?

A. Some policies will stipulate that your yacht is laid-up ashore for certain times of the year. Check your policy carefully and find out what cover would be in place if you were unable to lift the boat from the water, due to bad weather, tides, or busy boat-yards or if you wanted to launch the boat prior to the end of the laid up period.

Q. To what extend would my equipment be covered on a standard policy (i.e. sails, spars etc)?

A. Some insurers will only pay claims based on a percentage of the new replacement cost of your mast spars or sails, dependant on its age, leaving you to fund the difference. Typically, insurance companies will only pay two thirds of the replacement price on equipment over three years old.

Other items, such as your tender and outboard, life-raft and other personal effects or navigational equipment should be listed separately on the policy and all serial numbers advised to your insurers.

Q. Does it matter who is in charge of my boat?

A. The majority of yacht insurance policies will allow anyone to sail your boat with your permission, however it would be prudent to check this first. If you receive money in return, i.e. the boat is being chartered or hired; this may invalidate your policy.

Q. Will I need to obtain a survey for my boat?

A. Most insurance companies will require a survey for any boat aged 20 years old or more, and then again, every five years or so. Some yachts may require a survey earlier than this if they have sustained serious damage, if they are wooden, or if they have been self-built.

A list of local Surveyors can be found by searching the Database of Yacht Surveyors.

Q. What is legal protection?

A. Upon payment of an additional premium, some insurance policies can be extended to include legal representation if your boat is involved in a collision or other accident and you suffer financial loss or injury. If you are injured, it is even more important that you receive expert help so that any claim for damages is pursued quickly and efficiently.

Q. What about cover for sailing abroad?

A. This will vary, depending on the policy you have chosen and the cruising range will be shown on your policy. You should carefully check that the cruising range is adequate for you as you will not be covered if a claim were to occur outside this area shown.

Q. What should I do in the event of a claim?

A. You should always submit your claim as soon as possible after an accident. After all, the faster you make the claim, the faster you can get back on the water.

Any incidences of theft or criminal damage should be reported to the police - remember that you'll need the Crime Reference Number for the claim form.

You will be required to provide at least one estimate for the repairs or a written quote for the replacement items if a repair is not possible. Your Insurer may ask to inspect any equipment damaged, before authorising its replacement or send a Loss Adjuster or Surveyor to assess the damage.

Stolen boats should be listed by your insurance company, free of charge, on the new www.stolenboats.org.uk website.

Q. How quickly should I expect to have my claim sorted?

A. This will depend on which yacht insurance company you use and their speed of response. It can also depend how quickly your repairer can provide a quotation and then carry out the necessary repairs. It is Noble Marine's intention is to respond to you within two working days, advising how to proceed, so you'll know exactly where you stand, and how soon you can expect to be back on the water.

Comprehensive Yacht Insurance provided by Noble Marine will include:

  • 2,000,000 Third party liability for anyone using your boat with your permission. No excess is payable on third party only claims.
  • Your yacht (plus your tender, outboard and other personal effects if specified on the policy) will be covered for accidental damage, theft, fire and vandalism.
  • Damage to the yacht whilst in transit, but excluding third party liability in transit, as this should be covered by your vehicle's policy.
  • New for Old Cover - on all vessels less than three years old.
  • Full cover whilst racing for all sailing yachts.
  • 12 months cover whilst afloat or laid up ashore.
  • Cover for sails and covers, damaged by vermin.

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