Insurance vital for new boat owners across GCC
New boat owners taking their vessels out to sea to cool off during the summer are advised to purchase insurance or could put themselves at risk, according to an industry expert.
“There is a growing trend of owners using their boats for leisure, to spend time with family and loved ones. We expect to see this trend increase during the summer months, when families look for ways to pass the time with their children or celebrate the Eid holidays,” said Duncan Crerar, Head of Employee Benefits at Nexus.
“But with the purchase of a new boat also comes the responsibility of protecting both this exciting new possession and its passengers from harm,” he added.
Maritime experts predict more boat buyers in the GCC in the coming years, thanks to increased maritime developments, tourism, consumer confidence, family leisure time, and Ultra High Net Worth Individuals (UHNWI) in the region. According to the Superyacht Builders Association 2013 Economic Report, the Middle East has the highest ‘propensity to buy’ a superyacht, at 48%. This means that nearly half of the UHNWIs in the Middle East are likely to own or buy a superyacht, more than anywhere else in the world.
This year’s Dubai International Boat Show was a clear reflection of the region’s booming leisure maritime sector, hosting 430 boats worth Dhs1.8bn, and a 12% increase in exhibitors. The GCC hosts 64 marinas and 12,629 marina berths, led by the UAE with 30 marinas and 4,816 berths, according to ART Marine Marinas Division. The UAE also posted $170-220m in leisure boat design and boatbuilding in 2013, according to the Dubai Council for Marine and Maritime Industries and Drydocks World.
“We’re seeing a surge in new boat owners across the GCC, who may be tempted to take their boat on the water without insuring it first – but without insurance they could face potentially devastating consequences,” Mr Crerar said.
A leisure boat insurance policy includes two sections: physical damage and liability. The physical damage section covers accidental loss or damage to the boat and its machinery, whereas the liability section re¬fers to legal obligations to third parties –bodily injuries, loss of life, or damage to someone else’s property.
“Insuring a leisure boat is more com¬plex than insuring a home or motor ve¬hicle, but is just as important,” added Crerar. “Increasingly, boat owners are turning to insurance brokers to help them navigate through the complex process,” Crerar concluded.
Insurance policies can include Physical Damage coverage for damage or wear-and-tear of the boat, Personal Property coverage for when items are being loaded on board, and Towing and Assistance coverage, which reimburses costs of emergency assistance. Boat owners can also consider liability for removing the boat, chartering it to someone else, or carrying passengers for a fee; and uninsured boater coverage for injuries caused by a boat operator without liability insurance.
Insurance companies determine the rate for a boat policy based on a variety of factors, including value, length, and age of boat; type of boat; type of engine; mooring location; intended area of navigation; previous boating experi¬ence, and claim history of the owner.
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