Key things to know about boat insurance

There are two core principles that form the backbone of all watercraft insurance:

1. Liability Cover

This ensures your legal obligations to third parties covered in the event of injury, loss of life or property-damage occurring due to the use of your boat.

2. Physical Damage

This covers damage or accidental loss to your boat and its machinery – including the hull, engine, sails and any equipment that’s necessary to operate your boat.

Value versus Money

When looking at different policies, be sure to check whether your physical damage cover falls under New Replacement Value, Market Value or Agreed Value.

Agreed Value

This means you’ll be paid the amount stipulated on the policy if your boat is considered a total loss. An amount is agreed upon by the insurer and yourself upfront.

New Replacement Value 

Insurers will settle your claim at New Replacment Value or Actual Cash Value depending on the year model and condition of your watercraft.

Market Value

This option doesn’t provide as much coverage but the premiums are usually lower. You will get back enough to replace your boat’s market value at the time of the claim. The depreciation, current market value and condition of your boat will all be taken into account when deciding how much you will receive. As a rule, Market Value claim settlements apply to older model boats.

Trailer and transport cover

Interestingly enough, when your boat is out of the water and on a trailer, it’s usually still covered. It isn’t covered if your boat is being towed on a trailer, and the trailer causes damages to third party property. This would not be covered by your boat insurance but would need to be included under your motor policy.

However, when the trailer is not being towed and either on the dam bank or boat club slipway whilst you are using the boat, there is cover for physical loss of or damage too but no liability arising therefrom.

Policy Limitations

Most policies have territorial limitations. For example, some policies offer cover that applies to any body of water within Southern Africa, and extends as far as 12 nautical miles from the coast of South Africa, Namibia and Mozambique. Ensure you check that your policy covers you in the locations you wish to visit. Certain policies may even exclude certain high-risk areas.

If your watercraft is damaged in any country outside the South Africa, some insurers will only settle your claim once it’s been brought back to South Africa and you will most likely have to pay the costs of getting your watercraft back to South Africa.

If your watercraft is lost or totally destroyed in any country outside of South Africa, you must immediately report it to the police station closest to the area of the loss, as well as to your insurer.

Additional Coverage

A good policy should include cover for the following liabilities:

• Medical payments: This covers your first aid, ambulance and hospital costs in the event of an accident. Passengers who are injured will also be covered.

• Personal property: This covers the loss of any personal items such as clothes, gear and more.

• Third party liability: This cover is not obligatory, but it covers you and your passengers in the event of injury caused by another boat owner who has no liability cover.

Points to remember

If your watercraft is older than a certain age, some insurers will require a survey report before extending cover. If this report is not on file, your claim could be rejected. 

Always specify your boat’s accessories, stuff like life jackets, fish finders, ski equipment,  etc

Make sure you specify your motor and advise your insurer if your watercraft has an outboard or inboard motor.

Some insurers will cancel your policy if your watercraft and its use don’t comply with the following requirements set out in the Merchant Shipping Regulations 2007:

If the watercraft does not follow the design and construction requirements;

If the person piloting the watercraft does not have a valid Certificate of Competence (unless that person is supervised by a person with a valid Certificate of Competence);

If the watercraft does not have a valid Certificate of Fitness or Local General Safety Certificate.

These SAMSA requirements do not apply if the watercraft is one of the following:

• A sailing watercraft less than 9 metres long;

• A power driven watercraft under 15 horse-power;

• A watercraft propelled by human power alone.

What do our policies cover?

We offer highly flexible cover for a wide range of watercraft, including boats, dinghies, yachts, cats and jet skis. Boating equipment and boating accessories also fall under the cover of this policy. However, should you require more specialised cover, we do offer policy extensions.

For more information on our policies, please contact Melissa on 044 382 0550 today.

* This article is provided for informational purposes only and should not be construed as legal or financial advice.