Pleasure & Commercial Marine:
Definition of Hull & Equipment:
It is most important that you check what is included under this definition in the policy wording attached to your marine insurance. Some insurance companies include all items, both attached and unattached, used in the care, maintenance and operation of the vessel. Others include only attached equipment and often include an automatic limit for miscellaneous unattached equipment (in this case you would need to check if the automatic limit was enough to cover what you had). Tenders (dinghy’s) and their outboards, if any, are often included in the main hull limit, however, some insurance companies wish them to be listed separately with their individual values, while others include an automatic percentage with a maximum limit (which can usually be increased for an additional charge).
Generally, total losses for vessels are paid out on the basis of the Actual Cash Value (similar to Market Value) of the vessel immediately prior to the loss. Some companies that specialize in marine insurance will insure your vessel on an Agreed Value basis, which means that, in the event of a total loss, they will pay out full policy limits. Partial losses are normally repaired with new materials, with the exception of sails and canvas coverings. The form of adjustment is always stipulated in your policy wording, so it is a good idea to familiarize yourself with it. THERE ARE ALSO POLICY DEDUCTIBLES WHICH MAY VARY ACCORDING TO THE TYPE OF ITEM DESTROYED OR DAMAGED.
Liveaboard & Charter Vessels:
There is usually a Warranty or Exclusion regarding this use of your vessel without permission from the insuring company. Some insurers can amend your policy to include this use, and others insure for pleasure use only – so it would be required for you to cancel your existing policy and take out one covering Liveaboard or Charter with a specialty market. Always contact your agent if you anticipate changing the use of your vessel.
Warranties are special clauses which date back to original marine insurance and are subject to specific Marine Law. A breach of any warranty immediately voids your policy from that point on, even if the activity causing the breach is discontinued. Warranties are usually found written in relation to the use of the vessel: PLEASURE USE ONLY WARRANTY or the area of operation: NAVIGATIONAL WARRANTY or incorporated due to a refund in premium for winter lay-up: LAYUP WARRANTY. You must contact your agent and make appropriate arrangements prior to contravening any of these warranties so as to not invalidate your coverage.
Usually vessels over 5 to 10 years old, depending on the type (power boats younger, sailboats older) require a marine survey be done prior to insurance being quoted or put into effect. A Marine Surveyor will not only establish the approximate value of the vessel, he will outline its operational and safety equipment and make any recommendations as to improvement to align with current Coast Guard Regulations. An insurance company wishes to view a survey so that they can ascertain that a vessel has been well maintained and is safely equipped. If there are any recommendations, other than of a cosmetic nature, they are usually required to be done within a certain limit of time. A Marine Survey usually has to be redone every 3 to 5 years, depending on the age and type of vessel.
Please discuss basic and optional coverage for the following with your insurance agent:
- Tender & Tender O/B
- Personal Effects
- Off Premises Equipment
- Unattached Equipment
Besides the maximum percentages or dollar limits which might apply to Unattached Equipment and Personal Effects, there are some “target” items which are excluded or carry specific low limits, such as: Money, Jewelry, Furs, Silverware, Securities, China, Antiques/Collectibles. Computers and Portable Phones are also restricted unless they are used for the maintenance or operation of the vessel. If there are items of this nature kept normally aboard your boat, talk to your agent about the possibility of having a special floater added to your home insurance to cover them.