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Your Guide to Marine Insurance
Your boat is an important purchase in terms of both the financial outlay and lifestyle value. Whether it's a $15,000 tinnie or a $200,000 racing yacht, your investment needs to be protected from theft and damage or a mishap that injures yourself or another person - if for nothing else but piece of mind.

Boat insurance is a necessary evil that all boaties hope they'll never need. But it's not just loss and damage to your craft that's of concern, but ever-increasing risk of theft.

The day started out innocently enough. In fact, the two brothers couldn't have picked better weather for a leisurely cruise to Sydney Harbour. They set off in high spirits from Pittwater to watch the Olympic Closing Ceremony. They had their wives and children with them.

The sea was calm and the sky was perfectly clear. Not that a weather change would worry this gamefishing boat. It was equipped with everything one needs to ride out a storm: long-range communications, radars and satellite navigation, giant fuel tanks, and more.

Astern of the gameboat was another smaller cruiser also bound for Sydney. Someone on the small cruiser noticed a trail of smoke emanating from the air intakes or exhausts of the gameboat up ahead. As they say, where there is smoke there is fire.

As quick as that, the skipper lost his HF radio, then his engine gauges followed by all other electronics. A crewman opened the hatch to the engineroom and was enveloped by smoke. Someone grabbed the lifejacket on the bridge and put the wives and children in the back of the boat.

They were forced to abandoned ship and were, luckily, picked up by the boat following astern. Within minutes the luxury game-boat had burnt to the waterline. It sank like a lead balloon.

With that boat went the dreams of a couple of keen anglers who had set their sights on cruising to Cairns, fishing for giant marlin, and partaking in the tournament circuit off Sydney over the coming gamefishing season.

Luckily, no lives were lost. Fortunately, the boat owners can take some solace from the fact they haven't exactly lost everything. After all, their boat and fishing gear was insured. But far from that being the case for many other Australian boaties.

While it is true that behind every boat insurance claim is a grim story, it is also true that behind every uninsured boat is an even more gloomy story waiting to happen. If you must, think of boat insurance as a necessary evil. It is money spent in case something terrible should happen, insurance against losing an asset and, in the worse case scenario, being sent bankrupt through a law suit.

Boat insurance is something you never wish to use. But at same time, should something terrible happen, insurance brings peace of mind. Just about everyone with a boat should have it insured these days. The only exceptions are canoes and tiny tenders, though operators might like to consider that third-party liability is also a growing issue in this increasingly litigious society.

The country's largest marine insurer, Club Marine, says there is a vast number of boats not insured. A lot of boats are also under and over insured. Most that are covered are insured for market value, though you can also go for an agreed-value policy. The latter may well be more appropriate for a classic boat, custom, or one-off craft.

But whatever you have, boats of all shapes and sizes seem to be the target of unprecedented levels of theft these days. In fact, theft of equipment from boats in Sydney is downright outrageous. Most claims for theft come from Sydney, the Gold Coast and Brisbane. Because personal watercraft are especially hot property, many insurers have special conditions applying to PWCs.

Insurance premiums
Of course, insurance premiums vary depending on where you store your boat, its intended use, the construction, and the type of vessel. Some insurers have provision for no-claim bonuses up to 25%. Along with that, Club Marine offers discounts up to 60% while your boat is laid-up.

Among the things a good marine policy will cover you for are: loss or damage if your boat sinks, breaks adrift or is stranded while left unattended off an exposed shore, cover up to 200 nautical miles offshore and beyond should you need it, and cover if you are towing interstate.

Some companies will not insure your boat if it is moored in certain areas. For example, Little Manly Beach in Sydney is a lee shore that is dreadfully exposed to southerly winds. Because so many boats end up washed ashore here, some insurers refuse to cover those boats moored in the bay.

In other instances, there are loadings on your premiums for things such as yacht racing or waterskiing. While on the subject, waterskiers or yacht racers might like to consider taking out extra third-party coverage.

Loss of gear
Better insurers will also cover for loss of fishing gear and theft of waterski equipment. Many of those partaking in the Sydney-to-Hobart yacht race will have to have extra premiums in light of the tragedy which befell the fleet in the 1999 race.

Club Marine also covers for overheating of motors caused by external blocking of the cooling system. It has a new-for-old policy on mechanical and electrical components on the motor up to five years of age, and a facility for pay by the month direct debit and online applications.

It is difficult to generalise about boat insurance because every boat has to be considered on a case-by-case basis. Having said that there is one firm rule to follow: don¹t be penny wise and palm foolish. Spend those few extra dollars insuring your pride and joy.

After all, everyone thinks a boating accident will never happen to them. But then everyone knows someone for whom a boating accident has befallen them. Like the lucky anglers I know who escaped the aforementioned sinking. At least they were insured.

David Lockwood