January has recently seen one of the hottest months ever in the Western Cape, sending sunseekers outside to all sources of water; to the ocean, nearby dams and rivers. Now, with February – typically the warmest month of the year on the horizon, we can expect even more pleasure- or watercraft owners to maximise the hotter weather, on the water.
But, watercraft owners need to ensure that their risks are properly managed, says Tarina Vlok, MD at Elite Risk Acceptances, a specialist high-net-worth insurer, and subsidiary of Old Mutual Insure, because there is “a lot that can go wrong very quickly, both in and out and the water.”
She says if boat, yacht, jetski, kayak or catamaran enthusiasts want to protect their investment, it is important to ensure that their valuable watercraft is well insured and that passengers are suitably protected for smooth sailing.
“Typical claims we get when it comes to watercrafts is during the transportation phase. Holidaymakers or weekenders who tow boats often have someone drive into the back of them, or accidents even happen when stationary, due to the large, bulky and perhaps unexpected size of the vehicles in tow,” says Vlok. “What many policyholders might not know, especially first-time owners, is that when your boat is out of the water and on a trailer, it is generally covered by your policy. In the event, while towing your watercraft and your trailer causes damages to third party property. This would not be covered by your policy but would need to be included under your vehicle policy.’’
Or to explain it further: If you’re towing your boat, and you hit another car, or reverse into a parked car causing damage, your boat insurance will not cover this. When the trailer is attached to a vehicle of any description, the legal liability for incidents arising from the towing of your boat trailer falls to the driver or operator of the towing vehicle. If there is any damage caused to another party’s vehicle, this would generally be covered under the car insurance of the towing vehicle and not the watercraft insurance policy. Most insurers would, in this situation, cover your boat to the extent it is damaged in the incident (assuming no exclusions apply) but not any damage to a third party’s vehicle or the towing vehicle.
She adds that watercraft insurance is often covered under a separate policy.
“Pleasurecraft owners need to ensure that they have comprehensive cover in place whether it’s on the water or not,” says Vlok.
This is because watercrafts come with an expensive price tag, and therefore present unique risks. Owners spend a small fortune on these types of crafts and an even larger amount on maintenance and use every year.
She adds that owners must keep in mind that costs for owning pleasure crafts can include equipment costs, maintenance, storage, and licensing. When just looking at the price of a pleasure craft, prices range from R125,000.00 for a used small craft to more than R3,595,000.00 for a new high-performance model.
According to the Robb Report, sales of superyachts are booming thanks to a big rise in the number of billionaires, who are splurging up to $600 million on luxury vessels in an attempt to avoid places hit by the pandemic. The multimillion-dollar global luxury boat industryxperiencing a rebound after near-paralysis at the onset of the pandemic, with 2021 significantly outperforming any of the last 12 years.
Furthermore, if you require specialised services if you own a fancy pleasurecraft or yacht, such as flatbed trucks for abnormally shaped-vessels during the transport phase, be prepared to carry the costs yourself. For example, the Dutch city of Rotterdam is now considering dismantling a part of a historic bridge simply so that the superyacht owned by Amazon founder Jeff Bezos, can sail to the sea. The vessel, a 127-meter-long ship with three masts, is being built at a nearby shipyard and cannot sail to the sea from where it is being constructed. The cost of dismantling the bridge, should the city allow it, will be for the shipbuilder’s account.
“This underscores the importance of insurance for high value vessels even more going into 2022.”
What you need to know about protecting the value of your investment
Vlok says that it’s important to speak to a broker to meet your exact needs and partner with a specialist that has the experience to understand the specific requirements in managing, maintaining, and insuring these types of watercraft. Below are her top to tips keep your pleasure craft in perfect shape on and off the shore:
- Ensure to service your engine/s regularly, more so ahead of the winter season. This should include replacing the oil, oil and fuel filters, and engine anodes. Check belts and replace them as required. If you have an auxiliary outboard motor, service this as well with new oil, plugs, and impeller.
- Clean the interior and especially the bilges, making sure they are dry.
- Check for any play in rudder and shaft bearings. Also check for pitting or corrosion.
- As far as possible always keep your fuel tank/s full over the winter to avoid a build-up of condensation.
- Check the battery electrolyte level wherever applicable. Are the terminals clean and corrosion-free? Clean and protect as required.
- An important note is that most policies don’t cover the cost of fixing a mechanical breakdown (including seizing or overheating), but they do cover your boat motor if it’s damaged because of impact, fire, malicious damage, sinking, or grounding.
- There are liability issues to consider if negligent navigation leads to accidental damage to other vessels. Liability claims arising from negligence incidents have the potential to bankrupt the owner. Ensure that you have sufficient watercraft liability cover.