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Increase in risk

Boat insurance term, area: Owner duties

An increase in risk means that circumstances change after the contract is signed, so that a loss becomes more likely or more costly. Typical examples afloat are chartering the boat out for money, going beyond the cruising limits named in the policy, and moving the berth from a guarded marina to an open, unattended jetty. Policy wordings normally oblige the owner to obtain consent beforehand and to report any such change as soon as it comes to light. Staying silent can be expensive, because an insurer may then cancel the contract, reprice it or cut the payout after a claim.

What to check: Two questions for your own contract: does it name chartering, a change of berth or leaving the cruising area as an increase in risk, and is written consent required before the change? And what deadline applies for reporting a change once you notice it?

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