Insights into boat insurance

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Insights into boat insurance How an insurance policy excess can help

IS your boat insurance excess excessive?

Well, that depends on a number of factors and they are worth understanding if you want to ensure that you’re securing the best policy to cover your marine on-water and on-land needs.

Firstly, what is an insurance excess?

Many people will understand that an excess is an amount of money they will need to pay at the advent of a successful insurance claim.

It is the ‘out of pocket’ expense or your contribution, and it’s the same for many other forms of insurance.

However, what are less well known are the correct answers to some very important insurance excess considerations.

Some example considerations are: • Is an increased excess applicable for certain events such as a lightning strike or a cyclone? • If you have a larger vessel, is there an excess payable if you sustain a claim while berthed in your usual berth? • Is there an excess that applies to a tender and its outboard? • Does the excess apply if your vessel is a total loss?

Not all policies are the same with regard to excesses and you don’t want to be dealing with the usual difficulties of an overseas call centre when it comes to getting answers at the time of lodging an insurance claim.

The questions above are typical of those you need to ask before taking out a marine insurance policy.

But back to excesses themselves, how they work and why they exist.

Let’s assume that something goes pearshaped and you lodge a marine insurance claim.

And let’s assume that your marine insurer says in effect: “Yes, you have a claim and we’ve assessed the repairs to be $10,000 and we have approved that amount.”

Of that $10,000, you might be required to pay $500 or so, with the insurer covering the remaining $9500.

So, why is there an excess in the first place?

Excesses have the benefit of keeping insurance premiums reasonable.

By removing the potential for very small claims – typically the very small knocks, bumps, damaged and lost equipment – premiums can be kept at a competitive level.

If you hire a motor vehicle from a large brand name car company, you will invariably find there’s an excess on the insurance policy as part of the rental agreement.

Some companies offer the facility to pay an even higher fee to remove the excess completely.

Likewise, with household insurance there often are excesses applicable.

In general terms, the principle is the same whether it is marine insurance, motor vehicle insurance or home insurance – by removing the small ticket items from insurance coverage, premiums can be kept down.

Not only that, but a significant amount of administration time and paperwork is removed as well, which again results in keeping insurance premiums competitive.

So, while an excess can keep the cost of your premium down, it also can be a disadvantage in some circumstances if you don’t fully understand what it entails.

The key issue is to make sure you know when an excess applies, how it is applied and whether you have enough detail about the excess to make an informed decision before entering into a policy contract.

Specialist marine insurers such as Nautilus Marine have an intimate knowledge of where boat owners should be in terms of their excesses and can explain them in detail.

Nautilus doesn’t adopt a ‘one size fits all’ approach to marine insurance – there are different streams suited to different applications.

And that’s where localised, informed and specialist marine insurance comes into play.

Have a chat, explain what types of boating you do, where you operate your vessel, where you keep it, the details of the boat and other equipment such as electronics and accessories as well as whether or not it is on a trailer.

That will give you a good overview of what to expect when a formal, written document called a product disclosure statement is presented to you, along with an invitation to insure in accord with its terms and conditions.

Any special conditions and excesses should always be explained clearly in your insurance policy’s product disclosure statement.

If you need further information, contact Nautilus Marine Insurance on 1300 780 533 for any boat insurance requirements.