The words a claim turns on

An agreed value is a sum fixed in the policy that counts as the boat's value if she becomes a total loss, with no deduction for age. Without it the insurer works out market value on the day of the loss, meaning the value after depreciation, and for a boat ten years old that is regularly well below the sum insured. Even so, an insurer can usually challenge an agreed figure that is far above the boat's real worth, so it should reflect a realistic replacement cost, ideally backed by a surveyor's valuation.

What to check: Is the hull insured on an agreed value or a market value basis? Does the agreed value hold for the life of the policy or only for a set number of years, and how are partial losses settled?

All risks cover protects the boat against any accidental loss or damage unless the wording specifically excludes it. The opposite approach is named perils, where only the listed events are insured and anything nobody thought to list is not. The practical difference is the burden of proof: under named perils it is the owner who must show the loss fits one of the listed events, while under all risks it falls to the insurer to point to an exclusion.

What to check: Does the hull section say all risks, or does it list specific perils? If it is all risks, read the exclusions carefully, because that list now defines everything that is left out.

A marine casualty is an incident on the water, usually a collision or a grounding. An incident report records what happened, where and when, the witnesses and the damage, and is signed by both parties without any admission of liability. Photos, the log entry and positions from the plotter add weight to it. Filled in at the scene, it is the cheapest evidence there is.

What to check: Does the policy provide an incident report form, and how soon must a collision or grounding be reported? Does the wording forbid admitting liability or agreeing a settlement at the scene?

The cruising area, also called navigation limits, is the stretch of water agreed in the policy where cover applies. Sail beyond it and cover may fall away, and the area cannot be extended after the event. A passage outside the limits, such as crossing Biscay to reach the Mediterranean, needs agreeing before departure. Some policies also add exclusions for hurricane or cyclone zones.

What to check: Where exactly do the navigation limits end, and are there seasonal restrictions? Is there a hurricane or named storm clause, and does cover continue while the boat is laid up ashore, lifted or trailed?

The excess, called a deductible in some wordings, is the part of each claim you pay yourself. Choosing a higher excess lowers the premium. Check whether it doubles in certain situations, for example theft when the boat or outboard is not kept in a locked building, and whether different sections of the policy carry different excesses.

What to check: What is the standard excess, and is it higher for theft, storm damage, or sails and rigging? Is it waived for a total loss, or when the damage was caused by a third party who was at fault?

Gross negligence is a serious failure to take the care any reasonable skipper would take: leaving a boat poorly moored when a gale is forecast, sailing without a lookout, leaving a seacock open. Many wordings then allow the insurer to reduce or refuse a claim. Whether a policy gives up that right, and how far, is the most important single difference between policy wordings, and it is rarely on the front page.

What to check: Does the wording mention gross negligence, want of due diligence or lack of reasonable care? Is there a clause waiving that defence, and up to what share of the sum insured does it apply?

A multilingual document proving that insurance is in force. In countries where boat insurance is compulsory, such as Croatia, Italy and Spain, marinas ask for it before allocating a berth and officials ask for it during checks afloat. A certificate in English alone can cause delays, so British owners keeping a boat in the Mediterranean are well advised to carry one in the local language too.

What to check: Is a certificate provided, in which languages, and does it show the liability limit and the boat's details exactly as registered? Can a fresh copy be obtained quickly if it is lost or checked abroad?

A confirmation to a bank or finance house financing the boat that it will receive the settlement if a claim is paid. Lenders regularly require it for a marine mortgage, a boat loan or a lease, and many ask for fresh proof each year. When the boat is sold or refinanced, the note on the policy has to be updated or removed.

What to check: Is the lender named on the schedule as loss payee, and what happens if the policy lapses? Does the insurer have to notify the lender before cover is cancelled or changed?

The limit of indemnity is the most the liability section will pay for damage or injury you cause to others. Look beyond the headline figure to any sub limit per injured person: some policies quote ten million in total and then cap personal injury at three million per person. Marina contracts in the UK and around the Mediterranean often set a minimum third party limit, so the figure also decides where you may berth.

What to check: What is the overall limit, and is there a lower limit per person or per event? Does the figure meet the minimum in the marina contract and in the countries you plan to visit?

Market value is what the boat was worth on the day of the loss: the replacement cost less deductions for age, wear and condition. Some policies apply a fixed scale by age, for example 80 percent of new value from the second year and 50 percent from the fifth. On older boats it is often this figure that decides whether a claim leaves the owner out of pocket.

What to check: Is a total loss settled at agreed value or at market value? If market value, how is it established, and does a depreciation scale apply to sails, engines or the whole boat?

A named perils policy contains a closed list of insured events, such as fire, storm, sinking, stranding and theft. Anything that is not on the list is not insured, however reasonable the claim may seem and even if nobody ever considered it. This approach is common in restricted hull covers and in entry level policies, where a lower premium buys a narrower promise.

What to check: Is there a list of perils in the hull section? Look for gaps that matter where the boat is kept, for example damage while ashore, during lifting, or accidental damage that happens without any storm.

A restriction that limits theft cover at night, often to the hours between 8 in the morning and 8 in the evening, or ties it to the boat being kept in a locked building. In practice it mostly affects personal watercraft and trailer rigs left overnight in a car park, for example on the way to a slipway or a ferry port.

What to check: Is there a night-time clause, which hours does it define, and does it apply to the boat, the trailer or only to personal watercraft? What counts as a secure place overnight?

A no claims discount reduces the premium for years without a claim and can be cut back after a claim. Some insurers have dropped the system altogether and always apply the full discount, which is simpler and works out cheaper after a claim. Owners moving from another insurer are often asked for written proof of their claims history before a discount is granted.

What to check: How far is the discount reduced after one claim, and after a second? Can the discount be protected, and does a claim where you were not at fault still count against it?

Osmosis is water absorbed into the laminate of a GRP hull, leading to blistering. It is a gradual ageing process, not a sudden event, which is why practically every policy wording excludes it, along with rust, corrosion and wear and tear. A pre-purchase survey with moisture readings is the usual way to find out before buying.

What to check: Does the exclusion cover only osmosis itself, or also damage connected with it? How does the wording treat damage from an insured event, such as a grounding, on a hull that already shows osmosis?

Cover is contingent, or excess of other insurance, when it only applies to the extent that no other insurer pays. That sounds harmless but changes the order of events: the other policy has to be examined and decline first, and that takes time. It is common in skipper liability and charterer's cover, where the charter company's own insurance usually responds first.

What to check: Does any add-on cover say it applies only in excess of other insurance? If two policies could respond, which pays first, and who deals with the claim while that is being decided?

Items on board that are not part of the boat: clothing, binoculars, tablets, fishing tackle. Policies often include them at no extra premium, up to a percentage of the sum insured or a fixed amount, and higher values can usually be added. Home contents insurance may cover some items on a boat as well, so it is worth comparing both before the season.

What to check: What is the limit for personal effects, is there a single item limit, and are valuables, cash or diving equipment excluded? Does theft from an unattended boat require signs of forced entry?

Obligations the policyholder must meet to keep cover intact: giving accurate information when applying, reporting a loss without delay, taking reasonable steps to limit the damage and keeping to any agreed security requirements. Some wordings draft them as warranties or conditions precedent. A breach can cost all or part of a claim, so they deserve the same attention as the cover itself.

What to check: Which conditions must be met before a claim is paid? Look for deadlines to report a loss, whether repairs need approval first, and any requirement to hold a qualification such as an RYA certificate or the ICC.

Spilled fuel, oil in the marina basin, a clean-up of a harbour or river ordered by the authorities. This damage affects third parties and the public rather than your boat, so it belongs under liability, and the bill can exceed any hull value. Harbour authorities can recover the cost of containment and cleaning from the owner responsible.

What to check: Does the liability limit apply in full to pollution, or is there a lower sub limit? Are clean-up costs ordered by an authority included, and does gradual leakage count as well as a sudden spill?

Salvage and towage cover the cost of recovering, towing and securing a boat after a casualty. These costs come on top of the damage to the boat itself and can exceed it, especially in remote cruising grounds without local infrastructure. A salvor working under a salvage agreement such as Lloyd's Open Form can claim an award based on the value saved, which is why the limit in the policy matters.

What to check: Are salvage costs paid within the sum insured or in addition to it, and is there a separate limit? Does the policy ask the owner to contact the insurer before signing a salvage agreement?

The cost of searching for and helping people in distress: lifeboats, helicopters, other vessels called to assist. It is a separate item and not to be confused with salvage, which is about the boat, whereas search and rescue is about people. Lifeboat crews in the UK and Ireland do not charge for saving lives, but abroad private rescue and assistance services may send an invoice.

What to check: Is there a limit for search and rescue costs, and in which section of the policy does it sit? Does it apply only to the rescue of people, or also to assistance for the boat?

Conditions that must be met for theft to be insured: a locked building, a fenced compound, a fitted immobiliser, a hitch lock on the trailer. If a requirement is not met, the insurer may refuse the claim or the excess may double. Such requirements tend to be strictest for outboards, personal watercraft and boats kept on a trailer.

What to check: Which security measures are required, and do they apply at all times or only when the boat is unattended? Is a specific approved immobiliser, tracker or outboard lock named in the wording?

Subrogation is the insurer's right, once it has paid a claim, to recover the money from whoever caused the loss. It works in both directions: if your insurer pays and someone else was to blame, it pursues them, and another owner's insurer can equally come after you. That is why third party liability cover matters more than hull cover: a recovery claim for someone else's yacht can be far larger than the value of your own boat.

What to check: Does the liability section defend claims that seem unjustified, including legal costs, and does that apply abroad? Does the policy give up recovery against family members or crew using the boat with permission?

Sue and labour costs are what you spend to prevent or reduce a loss, such as pumping out, extra mooring lines or a tow into shelter. As a general principle an insurer reimburses them once an insured loss has happened or is immediately threatened, but not before. That is why lifting a boat out as a precaution ahead of a forecast storm is generally not recoverable, even when it is the sensible thing to do.

What to check: Does the wording include a sue and labour clause, is it paid in addition to the sum insured, and when do costs count as reasonable? Does it ask the owner to contact the insurer before larger measures?

The value you declare for the boat and her equipment. It sets the upper limit of what the hull section will pay and forms the basis of the premium. Set it too low and you are underinsured; set it too high and you pay premium on value that does not exist. A surveyor's valuation or recent asking prices for similar boats give a sound starting point.

What to check: Which items are included in the sum insured: sails, rigging, tender, trailer, fixed electronics? How are upgrades made during the year added, and what does a mid-term change cost?

Theft of individual items rather than the whole boat: outboard engine, electronics, tender, liferaft. Restricted hull covers regularly exclude it and insure only the theft of the entire vessel. Outboards and portable electronics are quick to remove and easy to sell, which makes them attractive on moorings and in boatyards.

What to check: Is theft of parts insured, including outboards, tenders and removable electronics? Are there extra conditions, such as the outboard being locked to the transom or taken ashore when the boat is left?

Underinsurance arises when the sum insured is lower than the boat's real value. The insurer may then reduce the settlement in proportion, a principle known as average, and this applies to partial losses too. Insure for 60,000 when the figure should be 100,000, and a claim for 10,000 of damage pays only 6,000.

What to check: Does the wording contain an average clause, and is there any margin before it applies? Does it apply to partial losses as well as to a total loss?

An underwriting agent (often called an MGA or coverholder) is an intermediary holding wide authority from an insurer: it issues policies, examines claims and settles them itself, rather than simply passing paperwork along. The insurer carrying the risk remains the insurer, and it is the insurer whose money pays a claim. For the owner this can mean that the people who wrote the policy are the same people who decide the claim.

What to check: Which insurer actually carries the risk, and is it named on the schedule? Does the underwriting agent have authority to settle claims, and who should be contacted first after an incident?

Harbour authorities and other public bodies can order a wreck to be removed. These costs are a separate item and arise on top of the settlement for the boat, even when she has already been paid out as a total loss. Marina contracts commonly make the owner responsible for removing a sunken boat from the berth.

What to check: Is wreck removal included, under hull or under liability, and is it paid in addition to the sum insured? Does the cover still apply after the boat has been settled as a total loss?