Insuring your boat protects both you and your asset.
Buying a boat is a big decision and an expensive proposition. This is why ensuring that your boat is adequately protected - against damage or any other unforeseen circumstances - becomes a priority. This is where insurance steps in.
According to chartered insurance broker S Rajagopal, Manager-Special Risks, Gulf Ocean International Insurance Brokers LLC, "The construction boom in places such as Dubai in the UAE has led to the creation and planning of waterfront properties including the Dubai Marine City. This has led to a lifestyle that promotes the use of personal and leisure crafts in the region. As a result, the number of crafts and ocean-going vessels, coastal and inland water traffic and its associated risks are also increasing proportionately. It is, therefore, pertinent for craft owners to protect themselves against not just loss or damage to their craft but also from various liabilities that may arise."
Regardless of whether you are a first-time buyer or someone who has multiple craft, insuring a boat is similar in some respects to insuring a car, or home. According to Rajagopal, while the concept of insuring one's own damage and liabilities is comparable, the kind of exposure and the resulting damages or liabilities are characteristic to a sea craft.
For example, the costs and techniques involved in recovering a sunken craft are totally different from towing away a damaged vehicle. There are also some factors peculiar to sea craft such as collision and pollution liabilities.
Insurance services
Individuals looking to insure their boats can either directly approach an insurance company that offers them a policy, as is done for homes or cars, or enlist the services of a specialist broker who analyses the coverage that a boat would need depending on the risk exposure of each craft.
"This depends on the configuration of a craft and the owner's choice of how it will be used. While one may prefer to use it for cruising, another may prefer a more adventurous use. As a result, what could be a good cover for an adventurous user with all extensions packed in may be too much or a waste of money for the other and vice-versa," says Rajagopal.
It is the job of the specialist broker to analyse the requirements of the owner, approach different insurance companies for quotes and then advise a suitable cover at a reasonable premium to the client.
"There are several factors that are evaluated by underwriters before they arrive at a quote for a craft. The criteria involves the brand and model of the craft, year of manufacture, type of body, engine and capacity, length, beam and draft size, whether used for private pleasure sailing or commercial use, age and experience of the captain, cruising limits and the value of the craft, among others," says Rajagopal.
"Generally speaking, cover in some form or the other is available for most standard crafts. Insurers may restrict or promote their offerings depending on reinsurance facilities, past loss experience and focus areas," says Suresh Nair, General Manager, Gargash Insurance Services.
According to Rajagopal, each insurer will have a choice of risk that they would like to concentrate upon and an experienced broker would know who to approach for a competitive quote for that particular type of craft.
Underwriters tend to shy away from very old craft (unless refurbished recently) , craft with bad loss history and craft sailed by inexperienced individuals.
According to Nair, a basic policy should cover accidental damage caused by maritime perils such as stranding, sinking, heavy weather, fire, lightning, collision and theft, in addition to third party liability.
Comprehensive policy
On the other hand, according to Rajagopal, a more comprehensive policy would include:
- ? A land transit cover when towed;
- ? A personal effects cover;
- ? Coverage for certain types of activities including racing, parasailing, etc;
- ? A crew personal accident cover; and
- ? Extended cruising limits.
Additionally, for certain craft, particularly larger ones, it is advisable to have a P&I (Protection and Indemnity) cover too. This is required to cover liabilities and damages that are not covered under standard yacht/hull policies.
GLOSSARY
A boat for every occasion
From a canoe to a super yacht, leisure boats come in every shape and size and are suited for a range of activities from fishing to cruising and sunbathing. Here are some of the boats that you may encounter at the Dubai International Boat Show.
Air boats: The boats are flat-bottomed craft that have a propeller linked to an automobile or aircraft engine. Their structure helps them navigate through shallow bodies of water including canals, rivers and lakes. These are typically used for viewing natural landscapes and fishing.
All-purpose fishing boats: Made from aluminium or fibreglass with mostly outboard engines, these boats are structured to house everything from fishing equipment to seating including bench seats and pedestal chair-back seats.
Bow riders: These are good all-purpose, fast and manoeuvrable boats that come with forward access to the bow, which is great for those who want a spot to soak in the sun. These vessels are powered by outboard or stern-drive engines and are best suited for cruising for short distances and even water skiing.
Canoes: These boats have been in use for centuries. They can be used to navigate shallow waters or even rapids. They also are great for fishing trips. You can also get these boats in aluminium and composite material. Canoes are pointed at both ends and powered by paddles.
Cruising sailboats: These boats range from about 30 ft to 60 ft, and have open-cockpit seating above decks and one or more cabins below.
Day sailers: These are small sailboats that are ideal for short day trips in calm waters. Day sailers often have a small cabin or area below the decks for storage.
Dinghies: These are small sailboats that come with sails, a centreboard and rudder. They are best for use just off the beach or close to land. They are also used for small-lake sailing and racing. You can also use a rowing dinghy to go fishing close to land.
High-performance boats: These boats boast sophisticated engines that are outboard or stern-driven. They are usually deep- vee or dual-hulled. These powerful craft can reach speeds up to 60 mph.
Jet boats: These speedy boats get their name from the jet pumps connected to their engines. These craft range from 12 ft to 18 feet.
Kayaks: These are small boats with covered tops. They are navigated using a double-bladed paddle and are used by one or two people. These can be used for short distance to navigate white-water rapids and lakes or along the coastline.
Motor yachts: These boats start at about 30 feet and can go up to 60 or more. They are great for cruising at sea or entertaining friends at the dock. They offer everything from comfortable and elegant cabins to a more spacious aft deck area for fishing enthusiasts. They often have fibreglass hulls, twin inboard engines and high-end technology like their counterparts, the offshore sport-fishing boats.
Multihull craft with sails: Dual-hulled boats are known as catamarans while trimarans are boats with three hulls.
Super yachts: A super yacht can be either a motor or a sailing yacht. These vessels are more than 24 metres in length and can reach up to 110 metres. They are the ultimate in luxury with numerous cabins, fishing areas, sunning areas and other customised applications.
Waterski boats: These are specially constructed for water sports including water skiing and wakeboarding.
