Watercraft

If your business involves the shipment of goods locally or abroad, whether inland or across the ocean, you need to realize that the moment those goods leave the door, they change hands many, many times, and there's no knowing what may happen.

To protect your goods and your business, you need to have marine insurance. But how do you choose the right one? Here are a few dos and don'ts:

1. Don't confuse marine insurance with boat insurance. Boat insurance protects water vessels and its passengers. It's like car insurance, except the car floats on water.

Marine insurance is an altogether different banana. Despite its name, it is not limited to protecting waterbornecargo. It protects cargo transported on dry land as well, on top of protecting the vessel that carries the cargo.

This is why there is such a thing as "dry" marine, for land-transported cargo, as well as "wet" marine, for cargo shipped via actual ships.

2. Don't lie on your application form. Don't conceal relevant information either. There is a fine line between the two: lying on your form means you deliberately put in wrong information. Concealing information means that it was not mandatory for you to divulge the information but you know that divulging it would have affected your policy in an adverse way.

Either way, should it be discovered that you lied or concealed relevant information, it would most likely void your policy, defeating the purpose for which you got the insurance in the first place.

3. Don't break your warranty. In insurance law, a warranty is fundamental to the performance of the contract. If it is breached, the non-breaching party may terminate the contract in addition to claiming damages.

One common implied warranty in marine insurance is the seaworthiness (or road worthiness) of the vessel.

Be aware if a warranty is breached, it will not help the insured to remedy the warranty; the policy will be rendered null and void regardless.

So before you take out a policy, make sure you are aware of all the warranties included, and ensure that you breach none of them. Which brings us to our first do...

1. Do read the fine print. While the fine print can be tedious to read, we all know - some through painful experience -ignoring it is like parking under a construction site: It's just a matter of time before something hard and heavy hits you on the head, and you may not live to regret it.

The fact is, unless you're a first grader just learning to read, it won't take you five minutes to read the details of the contract you're entering into. (Nevermind if it feels like an hour - it's really not.)

The fine print will tell you the details of what you're paying for, what rights you may have that you may not have been told about, and what conditions are not covered by your policy, and what actions will render your policy null and void. For instance, inadequately packed cargo is usually not covered. Neither are dangerous items such as combustibles, firearms, and chemicals. Others may not cover food, timber, and animals. There may also be navigational limits that, if exceeded, will void your policy.

2. Do compare policy offers. And don't rely on price alone.

Perhaps the reason why that policy is so cheap is because it only covers actual value, which is the value of your insured item at the time it was lost - and this includes depreciation, so you'll probably end up getting much less than what you expected.

On the other hand, that other policy may cost more, but it insures your item for the amount you had agreed on (agreed value), on paper, so when the item is lost, you get compensated for the exact amount you're expecting, which will allow you to immediately replace the lost item with a brand new one.

What about the causes of loss covered by the policy? Non-filed policies only cover for specific types of loss and may not cover acts of god. Then again, maybe they do.

The other day, an acquaintance invited me to lunch at a nearby country club, as I drove into the facility, there was a sign by the big pond, which looks like a miniature lake, which said; "No Jet Skiing" - indeed, I got a big chuckle out of that, and I asked my acquaintance about it over lunch. He explained to me that some yahoos every year, and often put their jet skis in the pond and race around. They do it every year, and no one has ever said anything, except for a few older ladies who claim it is cruelty to animals as they are terrorizing the ducks on the golf course. If you knew this area, you'd understand what that's all about.

The reason the sign went up, is someone had crashed a jet ski, after they got up to speed and tried to jump it onto the golf course while the grass was wet. They did this a number of times, and even posted videos on YouTube, which I later went to see because I thought it was actually kind of funny. Yes, it was hilarious, until I watched the last video, which went viral and has a million views now. A girl tried to do the same thing on a 1200 CC jet ski, and she caught edge of the side of the pond, and the jet ski flipped over and launched her head first at about 25 miles an hour onto the grass.

In the video she just laid there not moving, later she got up and stumbled around, sat down with all her friends standing around, and the ambulance took her away for a severe concussion, she's lucky she didn't break more bones or even kill herself. Obviously the security at the country club was told not to allow anyone to use a jet ski on the pond anymore, and blamed it on the ducks habitat and the wetlands, which I thought was comical.

Nevertheless, the country club's insurance will not cover anyone who goes on a jet ski in their pond, and anyone who has watercraft insurance for their jet ski should already know that it is null and void if you're not in a legitimate recreational area. And the country club is for golf not for jet skiing. Let this be a lesson to anyone who tries such foolish stunts, even on spring break, if you don't have the insurance for your watercraft, you better be careful who you let ride on your jet ski. Indeed it is my sincere hope that you will please consider all this and think on it.

If you're a boat owner, there's a chance you may have overlooked obtaining the right boat or watercraft insurance policy. Perhaps you've been under the impression that your homeowner's policy covered your boat as well. The truth is that some homeowner's policies may provide limited boat liability insurance coverage, with the determining factor being usually the power of the boat motor. It's best to check your policy carefully and discuss your specific situation with your insurance agent.

Now's a good time to make sure you have appropriate coverage. And if you do have a boat or watercraft policy what exactly is being covered? There are different coverage options for boat owners to insure that their boat and its passengers are protected. These options include physical property damage, watercraft liability, medical payments, fuel/oil liability, uninsured watercraft, boat equipment, and emergency services.

The environmental disaster of the oil spill in the Gulf of Mexico comes to mind, and boat owners have shown concern about coverage for unforeseen circumstances. An oil spill from your boat could have a serious financial impact if you are personally responsible to pay for the clean-up. This type of occurrence is usually covered by the watercraft liability coverage on the boat owner policy. However, some policies do have separate limits that are specific to fuel oil liability.

Keep in mind that a personal umbrella liability policy, which provides an extra cushion beyond normal liability limits, does not extend to a fuel spill liability. Therefore, it's very important to carry $500K or $1MM in fuel spill coverage on the boat policy to make sure you're protected.

Boat owners may also neglect to take other operators into account when purchasing their policy. If you borrow someone else's boat, make sure your policy covers your liability on that boat, including fuel spills, which would be outlined under non-owned boat liability coverage. Although some boat policies will cover any "permissive operators" who drive the boat with permission, some boat insurance policies may provide coverage only to those operators listed on the policy. In addition, if someone operates your boat and causes a serious accident, they may be covered as a "permissive driver," but be careful because your policy may only cover those individuals specifically listed on your boat policy as operators. And this is a case where a personal umbrella liability policy could come in handy. While this policy would cover your liability exposure in operating someone else's boat, there are underlying limits that will likely leave you with a gap of $100,000 or more.

But here's the good news! There are a number of discounts that could help you save on boat insurance. These discounts might include policies on a new boat and diesel engines. You might also be eligible for a multi-policy discount on your boat and auto insurance. And remember that you may be able to earn discounts for successfully completing certain boat education courses.

If you own a marine vessel that is longer than 26 feet, you need yacht insurance. (If it is less than 26 feet, you need boat insurance.)

Yacht insurance will protect your investment from theft, damage, and other things that can cause partial or complete loss.

What do you need to look for when you choose an insurance policy for your yacht?

1. Comprehensive cover. Some policies cover your yacht only for accidents and damage. Others protect against fire. Still others provide only against theft or vandalism.

Naturally, just getting one sort of protection will cost you less. If you keep your yacht in a boat house, this will further lower the cost for your policy.

But how do you which of these dangers is likely to befall your yacht? In the end, it is best to get a policy that protects your yacht for all three risks.

2. Third-party liability. Third-party injury is the biggest headache you can get with your yacht. After all, should your yacht get stolen or damaged or completely burned down, you always have the option to do nothing and just swallow your loss.

On the other hand, if you and your yacht cause damage to others' property or injury on another person, you do not have the option of doing nothing. You will have to pay up.

Third-party cover will prevent you from having to cough up a huge amount of cash at one time just to keep yourself from getting sued. In any case, in the UK, you are required to have at least £2 million third-party liability before you sail in your yacht.

Incidentally, third-party insurance only applies when your yacht is in the water. Should your yacht cause damage to anyone or anything while your yacht is being transported from your boat house to the water, this should be covered by your vehicle insurance, not your yacht insurance.

3. New-for-old cover. Will your insurance pay for the cost needed to purchase a brand-new yacht should something happen to the old one? Or will your policy only cover the value of the yacht when the damage or loss occurred?

A new-for-old cover will ensure that you will have enough money to replace your old yacht with a new one. However, be aware that some companies set a maximum yacht age for your yacht - often three years - to receive this coverage.

4. Laid-up period. Some insurance companies will not cover you if you sail your yacht within a certain period during the year, when the boat yards are at peak season, or during bad weather. Check your policy to confirm the laid-up period requirement of your policy

5. Ease of claim. An insurance policy is only as good as your ability to claim it. The best way to find an insurance company that makes claim submission easy is by talking to your fellow sailors and getting referrals.

Repairs to any kind of boat can prove very expensive and that is why getting the right kind of insurance to cover such is important. However as you will soon discover when you carry out a search for the best possible boat insurance rates that they vary widely. So you need to spend time on looking at what is available and comparing the rates charged.

Of course there are other things that you can do which can further help to get you the best possible deals when it comes to renewing the insurance policy on your boat. Below we take a look at just some of the things that you could do that in the future could help to ensure that the boat insurance rates you are charged aren't as high.

1. The first thing you do when it comes to renewing the insurance for your boat is to check the limit on the policy you have currently. Is it actually reflecting the value of the boat as it is currently or has it remained that same as that which you paid for the boat originally. You may be surprised to discover that your boat is valued about what it is currently worth and of course this means that you pay much higher premiums.

2. The next thing to be looking at to help bring down the insurance rates for your boat is how much you are being asked to pay in deductibles. If you can afford to increase the amount you are willing to pay in deductibles (excess) if you should need to make a claim against the policy. Most boat owners tend not to make claims for smaller repairs to their boats, but rather will make claims for much larger ones such as damage because of the weather or the boat has been stolen.