Insuring Your Boat: Top Tips For Boat Insurance
A standard boat or yacht insurance policy is built from two core sections: physical damage cover for the hull, engines, sails and onboard equipment, and liability cover for claims arising from injury or property damage caused by your boat. On top of that structure, four things most often determine whether a policy is right for you; whether you're insured for Agreed Value or Market Value, whether you have an approved anti-theft device fitted, whether you can access a lay-up discount for months the boat isn't in use, and finally, the underwriter's assessment of your boat's age, condition, mooring location and your boating experience.
What Does Boat Insurance Actually Cover?
Physical Damage Cover
The physical damage section of a policy covers accidental loss or damage to your boat and its machinery. This extends beyond the hull and engine to include sails, rigging and other equipment required to operate the vessel.
Liability Cover
Liability cover protects you against your legal obligations to third parties, including bodily injury, loss of life, or damage to someone else's property arising from the ownership or operation of your boat. Minimum liability requirements can be set by the location you're boating in. For example, mooring at Rottnest Island requires a minimum of $5 million in legal liability cover.
Agreed Value vs Market Value: What's The Difference?
This is one of the most important decisions in a boat insurance policy, and one of the most misunderstood.
- Market Value: if your boat is a total loss, its value is assessed at the time of the loss, based on what similar boats were worth at that point.
- Agreed Value: the boat's value is fixed at the time the policy is accepted, based on a written valuation, and that figure is what you're paid out if the boat is written off.
What Affects The Cost Of Your Premium?
Underwriters weigh up a range of factors when calculating your premium. The most common are:
- The value, length, construction and age of the boat
- The type of boat, such as power or sail
- The type of engines fitted
- Mooring location and intended cruising area
- Your boating experience and claims history
- Whether you'll be laying the boat up for part of the year
- The deductible (excess) you choose
- Boats Over 25 Years Old May Need A Survey
If your boat is more than 25 years old, most underwriters will request a recent marine survey before quoting or agreeing to insure it. A boat in better condition is more likely to be approved for cover, and more likely to receive a competitive premium. Repairing or updating critical systems ahead of a survey can improve both the survey outcome and the underwriter's confidence in the risk.
Anti-Theft Devices And Lay-Up Discounts
An approved anti-theft device is a retail trailer anti-theft device sold through a recognised outlet, fitted according to the manufacturer's instructions. A combination of padlock and chain, or padlock and cable, generally does not meet insurer requirements on its own.
Many policies also include a lay-up period, the time your boat is out of the water and out of commission (over winter, for example). Underwriters typically allow a discount of up to 5% for each month the boat is laid up at agreed premises, so it's worth declaring this accurately.
Choosing A Boat Insurance Specialist
Working with an insurer or broker who understands boats and yachts matters both at the point of purchase and, more importantly, if you ever need to make a claim. Look for an underwriter with a developed repairer network, since this reduces the time it takes to settle a claim and get you back on the water.
Always disclose your full claims history and any other information the insurer asks for. Non-disclosure can put your cover at risk even if you've paid your premium in full.
Understanding how physical damage and liability cover work, and how Agreed Value and Market Value policies differ, puts you in a much stronger position when you're comparing quotes. Take the time to work with a specialist who understands boats, disclose your history honestly, and check your policy against the way you actually use your boat.
Frequently Asked Questions
What is the difference between Agreed Value and Market Value boat insurance?
Agreed Value insurance fixes your boat's payout amount at the time the policy is accepted, based on a written valuation. Market Value insurance instead assesses your boat's worth at the time of the loss, based on comparable boats in the market at that point.
Do older boats cost more to insure?
Age is one factor underwriters consider, but condition matters just as much. Boats over 25 years old are often required to have a recent marine survey before they can be quoted or insured, and a boat in good condition can still receive a competitive premium.
What counts as an approved anti-theft device for boat insurance?
An approved device is a retail trailer anti-theft device sold through a recognised retail outlet and fitted according to the manufacturer's or retailer's instructions. Combinations of padlock and chain, or padlock and cable, are generally not accepted as approved anti-theft devices on their own.
Can I get a discount for laying my boat up over winter?
Yes. Most boat insurance policies allow a lay-up discount, typically up to 5% per month, for the period your boat is out of commission at agreed premises, such as during the off season.
What is the minimum liability cover for mooring at Rottnest Island?
Boats registered to use a mooring at Rottnest Island require a minimum of $5 million in legal liability cover as part of their insurance policy.
