Boat Insurance - What price peace of mind?

by Sail-World.com on 24 May 2007 Last week Powerboat-World reported that a multi million dollar power boat had slammed onto the rocks of Mackay Harbour. It was like a scene from a high budget action film. The $1.8 million Dynacraft ended up high on the rocky sea wall and sustained significant hull damage. Fortunately the owner’s insurer Club Marine had an assessor on site extremely quickly.

Powerboat-World spoke to Club Marine’s Mark Bradley about the aftermath of the accident.

‘We financially could have been significantly better off if we’d left the boat up on the rocks overnight and got a heavier crane in the next morning to shift the boat. But there was a risk with the 6m flood tides coming and a south easterly blowing up.’

Club Marine was concerned about environmental damage if the boat was further damaged by being left on the rocks overnight. They were also worried that the damaged boat could become a hazard to navigation.

‘We recognised that there was a chance that the boat could break up, scattering debris up and down the Queensland coast. And potentially discharge sewerage, oil and diesel.’

‘It was one of those situations where we took a really hard decision; let’s make the boat safe and get it off the rocks. Up until that time the engines and everything were high and dry. We actually put the boat back in the water, towed it around into a safe, no traffic part of the harbour and purposely sank the boat.’

‘That’s not the sort of thing we like doing, and that certainly hurt, because that makes the boat now a total loss.’

The salvage operation apparently added another $200,000 to the insurance claim.

‘But it was the right thing to do. We’re lucky enough to have the right people on site quick enough to make the big decisions, and then have the financial strength to be able to wear losses like that.’

Mark Bradley says that he is proud of how quickly Club Marine people were on the scene. He commented that when choosing an insurance company, people should think about what will happen if they have to claim on the policy. He says that many people don’t seem to consider how expensive and stressful it can be dealing with the aftermath of an accident.

‘It’s amazing just how quickly a quiet day’s cruise can turn to pot. With all the consequences. You need to make sure when selecting an insurance company to look after you and the boat that they’re going to have the resources to be able to respond like that. And quite frankly we don’t think that there’s anyone that is a shadow of us in that respect.’

The proliferation of marine parks around Australia’s coastline means that being on the water has potentially become more expensive for boat owners. Although most of us would agree that the goals of marine reserves are necessary and admirable, there does seem to be an unnecessary profusion of red tape that accompanies the establishment of these areas.

Bradley commented that the regulations that establish the marine parks are particularly complex in Queensland, and that boat owners are expected to know exactly which zone they are in. Certain zones forbid discharge of effluent or other forms of pollution, or fishing.

‘You need to be a master mariner to know what bloody zone you’re in up there at the moment’ jokes Mark.

‘If you throw a fishing line out and you’re the wrong side of a line, or if you discharge your tanks, or you blow a hydraulic hose and you’ve got a small discharge of hydraulic oil; if that happens in the wrong part of the world you can be up for stiff six figure sums from the marine park authorities. And also you can be liable for the costs of making good any damage.’

With boat owners facing the risk of being held liable for environmental damage, Club Marine has responded by doubling their standard cover in the event of a claim.

‘There’s marine parks being established all around the coast so there is an increased financial risk to people operating their boats in those areas. We’ve responded by doubling our standard cover from $250,000 to $500,000 dollars.’

‘If fact we have clients who insist of having millions of dollars worth of that cover to give themselves peace of mind when they’re out on the water.’

Club Marine’s Peter Ryan added;

‘If you look at the policy, if there was liability imposed on the owner, we would then represent him, if it was covered under our policy. And pollution is covered under our policy.’

He emphasised the role a good insurer plays in handling an accident like the Mackay crash quickly and efficiently.

‘You shouldn’t worry about who your insurance company is. You should look further into it and find out what their policy is on repairers and assessors because at the end of the day, and especially if you’ve got a large boat or a specialised boat, you want to be dealing with people that understand the boats.’

One of Club Marine’s strengths is its network of offices and specialised personnel in every State. The network, which has been built up over more than forty years in business, includes everyone from boat dealers to salvage experts. Mark is concerned that more recently established insurance companies may not be able to match Club Marine’s customer service standards or quick response in times of crisis.

‘There’s nobody else in our world that’s got anything like our reach. So as a result 24 hours, 7 days a week, when it does turn bad out there, we’ve got the ability to be able to respond very, very quickly and the financial resources to be able to react quickly, regardless of cost.’
For more information on Club Marine www.clubmarine.com.au