Understanding your boat insurance premium
Your insurance premium should be easy to understand but we know this isn’t always the case. To make things a little clearer, we take a look at some of the factors that affect how much you pay for boat insurance and explain why the cost of cover is going up.
What makes up your boat insurance premium?
Company PremiumThis is the money we use to pay your claims and other costs. We also need to pay our insurance - it's called reinsurance.
Fire and Emergency Levy (FEL)If your boat is stored on land, a FEL will apply. The levy covers most of the work that Fire and Emergency New Zealand provides at the scene of an accident. We collect this levy on behalf of the government and pay it directly to Fire and Emergency New Zealand. FEL does not apply for permanently moored craft.
TaxYour premium includes a 15% Goods and Services Tax on the amount owing.
What factors impact your boat insurance premium?
The type of boat you ownBoats come in all shapes and sizes and unlike vehicles, boats don’t have one common design or build. This can make repairs more difficult at claim time depending on the type of boat and its construction. For example, lets compare a launch to a trailer boat. A launch is permanently afloat, making damage more likely due to marine related weather events. There are also increased costs due to haul out (removing your yacht out of the water), hardstanding (permanent parking/storing for your yacht), and more expensive parts.
The location of your boatWhere you store or moor your boat can pose different risks which an insurer needs to factor in to your pricing. For example, a swing moored boat has less protection from changes in the weather, tidal currents, and other boats than a marine moored boat. This increases the likelihood of damage and needing to make a claim. Different locations around New Zealand may also be more exposed to more weather events or higher marine traffic.
The construction and age of your boatBoats are made from many different materials and this can make each repair unique. Unlike a vehicle, boat hulls don’t have many bolt on, bolt off sections. This makes each repair bespoke to the type of boat and the damage it has sustained. The age of the boat can also make it harder or more costly to repair as there may be undiscovered damage.
How much you paid for your boatA higher value boat is usually made from premium materials and has more valuable items onboard. As it will usually cost more to repair or replace than a lower value boat, your insurance premium may be higher. If your boat has depreciated in value from new, it is important to remember that the cost to repair hull damage will be similar. Minimum premiums may also apply.
At Tower we consider many factors when we look at your premium. Our boat insurance is designed to really look out for you with lots of great benefits including a multi policy discount of up to 20% when you buy two or more eligible policies online. Ts&Cs apply.