Just like other things that you have gotten insured such as your house, vehicles, business, health, etc your marine property i.e. watercraft as well as the cargo in it also requires to be protect by some or the other sort of insurance. In fact, marine property faces a much more diversified set of risks as compared to the other things that you think must be insured. And like other insurance policies, marine insurance agreements too give you the option to opt to cover your marine property against certain risks or not.
There are five basic categories into which causes of damage to marine property have been classified. But before moving on to learning about marine insurance policies, you better know the types of watercrafts that exist.
Boats
These are usually between 25 to 16 feet in length and may be single, double or triple storied.
Yachtes
These watercrafts are meant for the adventurous and are usually great than 25 feet in length.
Personal watercraft
Relatively small watercraft meant for the use or one or two people are called personal watercraft. They include wave runners, jet skis and other vessels of the sort.
Now that you know the different types of watercraft, you must have realized that different marine equipment face vary in the way they are exposed to different risks. Given the diversity in risks
Newbuilding risks
This clause covers costs that might occur due to damage or destruction of the watercraft’s hull during construction. The person or organization that is building the hull will be reimbursed for such loss.
Yacht Insurance
The three categories of watercraft marine equipment may be used for either leisure or commercial purposes or both. In case, you own a leisure marine vehicle, Yacht Insurance would be one of the options you can choose from. It extensively covers any damage that may befall your marine equipment and the cargo within. Yachts, fishing vessels, etc are typically underwritten on a ‘binding authority’ or ‘lineslip’ basis.
War risks
Most marine insurance policies do not cover damages caused to marine equipment because of war strikes. If your boat has been wandering within a war zone, marine insurance earlier applicable would become invalid. For example, a tanker wander near the war stricken coasts of Africa would not any longer be able to claim coverage from its insurers.
Luckily, if you do choose to get your marine equipment covered against damage by war, you can do so by opting for the war risk clause. This clause was initiated by London-based Joint War Committee. The committee includes coverage against attacks that occur in the straits of Malacca because of rampant piracy in the area.
Increased Value
This coverage clause covers the difference between the insured value of the vessel and the market value of the vessel.
Overdue insurance
The Overdue Insurance clause is almost an absolute coverage policy because of the way marine vehicles now communicate among themselves. The insurance company insures the timely arrival of the vehicle containing cargo of third parties. In case it does not arrive in time and the vehicle is suspected to be lost, the to-be-recipients of the contents contained by the ship would claim their damage to the party with whom they were dealing with, which would in turn ask its insurer to reimburse its customers.
Because of improvement of communication marine vehicles with establishments on land, and the uncertainty of the condition of a marine body almost nullified, the overdue insurance clause has become obsolete.
Cargo insurance
In case your marine vehicle contains cargo, especially for commercial purposes, it is imperative that you cover it in case it gets damaged or destroyed. There are three different classes of cargo insurance – A, B and C. A covers the widest set of risks, B lesser than A, and C covers the least. Cargo itself is classified into different sorts ranging from very valuable to mundane.
Also, not choosing to have your boat insured might not be an option for you. Some states make it compulsory for boat owners to have their boats insured. In a state which makes boat insurance compulsory, docks do not allow the entry of insured boats.