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Eight boat insurance myths that get expensive after a claim
Short answer
Many owners only find out after a claim that their boat insurance works differently from what they
thought.
Eight myths cost owners money most often,
from relying on home liability cover for a motorboat to the phone that goes over the side.
One: my personal liability policy covers the boat as well. For rowing boats, canoes and small dinghies that is often true; for motorboats and larger yachts it usually is not, so check the boat clause in your home or personal liability policy. Two: the other owner's liability insurance will pay for my damage. Only if the other owner is liable, and on the water that usually requires fault. If no one is to blame, the damage stays with you or your hull cover. Three: hull cover always pays for a stolen outboard. Not always; some limited wordings pay only if the whole boat is stolen.
Four: gross negligence means no payment at all. Under many legal systems and wordings the payment is reduced according to how serious the fault was rather than refused in full, and some wordings waive that reduction up to a limit. Five: hull cover pays for wear and material defects. Not for the failed part itself, though often for the consequential damage to other parts. Six: my boat is always insured in winter storage. A season only policy ends with the season, and the boat then sits in the yard without cover.
Seven: the insurance pays even without a licence. If someone helms without the licence the boat or the waters require, many wordings exclude the claim. Eight: everything on board is insured. Cash, jewellery and musical instruments almost never are, phones and laptops only up to a limit, and anything that simply goes over the side usually not at all. Most of these myths can be cleared up by reading the policy wording before something happens: look at the theft clause, the gross negligence clause, the exclusions for wear and defects, the licence requirement, the period of cover and the limits for personal effects.
Worth remembering
Assumed
the insurance will sort it out
Written down
it is in the policy wording
Ten minutes with the wording before the season saves the argument after a claim.
Questions
What owners ask us about this
Does my personal liability policy cover my motorboat?
Usually not. Many personal liability policies include only rowing boats, canoes and small sailing dinghies. A motorboat normally needs its own boat liability cover.
Do I get nothing at all after gross negligence?
Not necessarily. In many wordings the payment is reduced according to the degree of fault, and some waive the reduction up to a stated limit.
Is my boat insured in winter storage under a season only policy?
No. A season only policy applies only during the season. If you want the boat protected in winter storage, you need cover that runs for the whole year.
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