Boat Insurance (PowerPoint)

							Boat Insurance – Definition,
   Types and Overview
Boat insurance, sometimes referred to as Marine Insurance, is a type of
insurance that covers boat and other marine-related damages. In certain
cases, the coverage may extend to the cargo or the docking area,
including any damages caused by cargo transfers or storage
transportation.

The policy for boat insurance is usually covered by four-quarters of the
insured liabilities involving third parties. These liabilities may arise in
value of crash with another boat (“running down”) and accidents caused
by wreck removal.

During the 1900s, boat owners gathered together to cover the remaining
quarter-based liabilities. The gathering, known as mutual underwriting
clubs, still exists today. In fact, they are serving as potential units for
other non-commercial and specialized marine (and non-marine)
insurances. Mutual underwriting clubs works on a basis of signing an
agreement to accept boat owners as members by means of “initial
calling”.
With every fund accumulated by clubs, re-insurance deals will be soon
considered for purchase. However, if any case of boat insurance loss became
unfavorable for the clubs, a number of “supplementary calls” will be granted.
• Boat insurance consists of different types of “specialized policies”. Some of
   which includes the following:
• Increased value: It protects the boat owner against discrepancies between
   the vessel’s market value and insured value.
• New building risks: This policy covers risks of hull damages during
   construction period.
• War risks: Unlike the new building one, this does not cover vessel sailing risks
   under a war zone like the risks of tankers sailing into the Persian Gulf.
• Yacht insurance: It includes liability coverage for small vessels such as those
   for fishing and yacht.
• Cargo insurance: This policy is underwritten under Institutional Cargo Clauses
   covered on an A, B and C basis (with A being the widest and C as the more
   constrained one).
• Overdue insurance: This policy is almost obsolete due to technological
   advancements. OI was considered the earliest form of boat insurance. Titanic
   for example had an OI that was notoriously underwritten upon the doorsteps
   of LLOYD’s.
The term “Average” in boat insurance has two distinct meanings:
• In a situation where the boat is under-insured, it is necessary for
  boat owners to insure an item that is less than worth every
  material they purchase. This way, the average will be applied to
  reduce payable amounts for coverage. Here, there are various
  ways on how to calculate the average but the under-insurance’s
  proportion in general is only applied to payout dues.
• In boat insurance, average can be declared in case of emergency
  repairs or partial loss to the vessel. Meaning, this covers
  situations involving the use of jettison cargo to ensure the boat’s
  protection from damages caused by stormy weather.
• The “General Average” in boat insurance requires all concerned
  parties to compensate any losses caused by cargo damages
  while “Particular Average” is imposed to a specific group of
  cargo holders. An “Average Adjuster” is a boat insurance claims
  specialist responsible for providing and adjusting general
  average statements.
The Marine Insurance Act is a standard policy that aims to give all
parties the prerogative to cover losses and damages to the boat.
Since each term in this policy has been amended during the
judiciary precedent of the last three centuries, the approval of
Marine Insurance Act went to a very thorough process. Since the
insurance is usually underwritten based on subscription, this is
where the filing of MAR Form begins. In legalized terms, liabilities
recognized by the policy are not “all” but somewhat “several”.
However, underwriters are held liable, but only for their proportion
or shares of risks covered.

The act states that the cover can be either on a “time” or “voyage”
basis. The time basis covers either long or short period of time (2 -
3 years as the most common) while voyage basis covers transits
between ports approved by the policy.
The agreed value of amount on marine insurance policies
technically means that both the insurance company and the boat
owner decided on the cost of damages that needs to be covered.
The policies for agreed value usually include replacing old or
damaged shipping materials with new ones. Majority of these
policies however, tends to impose actual cash values on particular
damaged items such as lower drive units, dinghies, batteries,
trailers protective covers and outboard motors. The liability section
here covers the owner from third party claims if the damage is
caused by the owner or his property from the vessel insured.
Hence, obtaining settlements is necessary.

http://comprehensive-insurance.org/boat-insurance-definition-
types-and-overview/