Insurance is never going to be the most exciting thing in your life, I hope. For most people, until something (probably bad) happens, insurance is just a piece of paper that’s thrown into the bottom of a drawer, or just another email in an ever-growing inbox. By definition, “Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses…” There are loads of types of insurance, each with a huge range of conditions and requirements. Most people are broadly aware of what they’re covered for, how many read the various documents and policy wordings, taking the time to truly understand them? Not many… if any. I all-too-often hear the line, “I’ve been sailing XYZ years and never made a claim”. While this may be true, it’s that one time something does happen that people are glad they had the right insurance in place, or as the definition stated: ‘financial protection or reimbursement against losses…’ The time of an incident isn’t the time to start trying to understand what you’re covered for. It’s a time of stress and uncertainty, knowing what you’re covered for might just help you sleep a little more easily. Like most things, not all insurance policies not created equal. Although the fundamental basis of insurance is the same across most policies, there are details often overlooked that can result in different outcomes when it comes to making a claim. It’s often said that you get what you pay for. When it comes to insurance is, cheaper is generally not better. Compromising on the quality of your insurance could save a few, few hundred, even a few thousand dollars. Though enticing at the time of paying for premiums, all too often we see choosing cost over quality come back to haunt policy holders. A top tip when you’re looking at an insurance product is to focus on what isn’t covered rather than what is. Insurance is often sold with a number of bells and whistles, designed to entice someone buying the policy. Insurers will often add these glossy benefits to a policy safe in the knowledge that the likelihood of a claim on these is reasonably low. When it comes to insuring your boat, if you know what cover you don’t have, you can improve your risk management, crew instructions, maintenance or other processes to better avoid a fight with the insurer at claim time. Remember, if you’re making a claim it’s probably because something bad has happened to your ‘pride and joy’, and that’s stressful enough. The New Zealand insurance market in regards to Hull, Boat or Pleasurecraft policies has been reasonably volatile over the last couple of years, with price increases, a reduction in providers, changing underwriting criteria... the list goes on. Shopping the market is worth doing but not always in your best interests, I recommend looking at who has been around the market and is here to stay. There have been a number of providers enter the hull market winning business on price only to exit the market when claim’s catch up, this often then leaves the owner without cover. Your broker is there to help and will help you decide what your best option is in the market at that point in time. Finding a good broker is, of course, the strongest advice I have for anyone looking for insurance. While Agents and Agencies represent the Insurance Company, a broker acts on your behalf, in your best interests. In a broker you have an industry expert in your corner who will advise and guide at the time of placement and advocate for you at claim time. Find a broker who specialises in the product you are buying, there are very few specialists in Marine Insurance placements. The team at PIC’s specialist Marine division all-too-often get calls from people who need help to when a claim goes bad. My tips for buying insurance for the Coastal (or yachting in general) are: - Focus on what isn’t covered rather than what is: understand what exclusions or restrictions are in the policies you are looking at and weigh these up to decide what works best for you, forewarned is forearmed; - Find a good broker and stick with them – engaging multiple brokers can be disadvantageous when sourcing cover; - Use a specialist Marine Broker, avoid direct dealings with insurers, agents or banks; - Make sure the company or person you’re buying cover from understands your individual requirements and the Marine insurance market; - Ask your provider what their claims process is and fit this into any form of crew or risk management plan you have for your vessel; - In the event of a claim, work with your broker to get a result. They are there to help, advocate and advise; - Use a reputable provider that has been around and has proven pedigree. If I can help at all with any insurance questions or requirements in preparation for this year’s race, give me a call on 021 850 858. At PIC Insurance Brokers, as well our Marine Division, we have Commercial, Domestic, Life, Health and Employee Benefits specialists who can help guide you through the fog. I’m looking forward to seeing you all for a good send at the 2019 PIC Insurance Brokers Coastal Classic.
Fair Winds and Fair Sailing.
Dan Garner
PIC Insurance Brokers Ltd. T 09 274 5751 M 021 850 858