Page 36 - Yachter Spring/Summer 2020

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XAXDXVXERTISING FEATURE
should be considered.
An important question to ask is, if a part
fails due to wear and tear, is the resulting damage excluded, or only the part that failed? Is that clear in the wording? Consider the consequences.
NEW FOR OLD
The term New for Old is used by insurers when they are replacing old items with new items. Most policies will make it clear what items may be subject to a deduction on the replacement costs if you make a claim.This deduction is a common feature in many insurance policies, but when and how does this operate? Does it apply when the boat or equipment reaches a certain age, or can it be applied at any time? It’s worth checking the wording here – if a deduction is made, does the deduction only apply to parts and materials, or to the entire claim including labour costs? Can you buy yourself out of this deduction entirely?
EXCESS/DEDUCTIBLE
‘Excess’ is widely understood to be what
we have to pay ourselves when we have a claim.The excess will sometimes be referred to as the ‘deductible’. Amounts differ from policy to policy as does the application – so if comparing two policies, one possibly with a higher excess than the other, look to see what type of claims it does or does not apply to. Some policies apply it to all claims except total loss; others don’t apply it to specified types of partial loss claims (for example fire or theft).
SERVICE, CLAIMS, OTHER COSTS?
When choosing an insurance provider you may wish to consider the customer service offered.Will you receive the service you need in the administration of your policy? Will you speak to a knowledgeable person or a call centre?
You only really test insurance when you
claim.
Boating isn’t a 9-5 pastime and should an
emergency happen, can you contact support 24/7 for immediate and relevant advice day or night? Is such support provided ‘in-house’ or outsourced? Can the claims management access the right support internationally?
Are the costs associated with the
policy clear? Are there additional fees to consider? Such ‘hidden costs’ can include documentation fees; cancellation fees; instalment charges and credit card charges. What may, on the face of it, appear to be a cheap quote may actually be more expensive due to such fees.
PREMIUMS
How are premiums calculated? Insurers
set what are called ‘equitable’ premiums – which means they should be fair to both the insurer and policyholder.There are two factors which determine premiums. One
is the risk element and the other is the probable cost of settling a claim.
When sailing further afield, insurers have to consider not only the geographical risks such as reefs and storm patterns but also
the cost to insurers of handling claims in locations that are further away.The cost of actual repairs can be compounded should repair facilities not be available, meaning the boat has to be moved to another location. If the boat can be repaired locally, the
claim may include the cost of transporting, for example, a replacement mast from the supplier to some far flung island.
Premiums need to cover not only the cost of claims but also the insurers’ administration costs.
In some years insurers will, indeed, make a profit, and at those times – particularly if you are one the lucky ones who haven’t needed to claim you may be inclined to think insurance is just a big rip off. But all insurers will experience years in which premiums do not meet such costs, in particular when you
take into account changing weather patterns and the rising cost of claims.
Insurers will assess what they believe to be the degree of risk each policy brings to the overall portfolio of business. So they will assess the experience of the owner or skipper, the type and age of the boat, the use to which it will be put, and the location in which it will be sailing and wintering. Why is location a risk?Well there are many reasons.A boat kept in a marina is subject to different risks than a boat on a tidal estuary mooring. Once the insurers have assessed
all the factors, they decide on a premium rate, which is then usually applied to the sum insured (value of insured property) to determine the annual premium.
The only way you will know how good your insurance is, is if you need to make
a claim.The vast majority of insurers will settle valid claims without any argument. However, if the premium charged wasn’t equitable could this lead to less generous claims handling? Choosing an insurance provider with an excellent claims reputation is therefore an important consideration.
Overall is the cover wide enough to meet your requirements? If comparing two policies and the premium differs, does this mean cover is compromised if offered for less premium? What risk does that present?
Established in 1970, Pantaenius has over 100,000 boat owners worldwide who enjoy the peace of mind our unique and comprehensive policy provides. If you would like more information on the products available please visit www. pantaenius.co.uk or if wish to discuss your insurance requirements please call +44(0)1752 223656.
www.pantaenius.co.uk +44 (0)1752 223656