What is the need of Boat and Watercraft Insurance?
Whether or not you are an experienced sailor, or an amateur watercraft racer, however, you will, at a certain point in your nautical career, be inclined to enter an insurance contract for whatever watercraft or boat you may own or consider owning. Insurance for watercrafts is not a counter-intuitive idea. Indeed, the sea has demonstrated time and time again that it can be a cruel mistress, if it chooses so. Needless to point out that even the most sophisticated and advanced crafts can become fixtures for coral reefs in the split of a second, and most of the times, it is not because of human error or lack of planning.
For boats and watercrafts, insurance is trickier than other types of insurance, mainly because it deals with a lot of unpredictable events that may occur at any time. A car you can put in a soundly-constructed garage and thus save it from most forms of natural disasters, but a boat is a floating shell that, as long as it touches its most dear element, the water, is never completely safe.
The first thing that you need to look after when purchasing boat insurance is what exactly the contract covers. Never miss out any spot, any letter of even the smallest print, for that may lead to disaster later. For this insurance, you will need to be pessimistic: thoughts like “What if my boat is caught by a violent storm, its mast is ripped off, then is suddenly hit by a tidal wave and the hull is ripped open by jagged rocks at the bottom which, under the circumstances, I don’t have the necessary strength or experience to avoid, is then thrown over and, with the momentum, completely destroys a pier?” should not be shrugged off as entirely too unrealistic. It is common knowledge that even the most improbable events are several times more likely to occur, if the scene is surrounded by water. This being said, spend your time and look at the documents. If something that is likely to happen in places where you normally take your boat out is not covered and cannot be amended to the contract, walk away and seek an alternate insurance agency.
Always remember to take into consideration what the boat will be used at, and where will it be most of the time. Combine this with what your ship actually is. Ideally, it should be a sturdy boat built specifically for the environment, which environment should be generally calm and with as few seasonal weather changes as possible. But this is not the case in real life, so think well at what might happen and, if you don’t see that laid out in the contract, ask.
But, say, the boat does get damaged and even destroyed at sea. What happens then? Will the company pay you in full? To find this out, you must look at the “salvage value” in the contract, as well as the “salvage clauses”. Stay away from contracts that limit salvage coverage, they are never a good idea. The salvage coverage represents the amount paid to professional boat rescue and salvage operators to get your ship to safety. And hopefully you don’t need to be told that when you see your sweet “Temperance” going down, the only thing you will not care about is how much the operator asks for.
It is best to look for policies that offer available repair funds separate from the salvage coverage. Otherwise, your boat, although safe, will still remain a wreck, because funds needed to repair it will be diminished by those paid to the salvage and rescue operators. It is best, if you have a $10000 worth boat, to have a repair reserve of $10000, plus a total salvage coverage of another $10000. This might mean higher rates, but it will also mean more fund availability.
Keep in mind that, when shopping for insurance on your boat, you are not necessarily shopping for the lowest rates possible, but for the most available and convenient contract. A disadvantage as it may be if you don’t intend to go through heavy weather, it is always better to be on the safe side.
Last, but not least, keep in mind that a cure doesn’t fit all in terms of boat insurance. Each journey, each boat, each location and each minor detail will have a different policy that is best for exactly that.
Shop smart, stay safe and understand the language the insurance companies talk to you in. That way, your boat will stay afloat and the wind will always be on your side.