Money: Without cover, you'll be sailing close to the wind

Many marinas and ports now insist on insurance, writes Edmund Tirbutt

SUMMERTIME is back, but some pleasure sailors making their annual return to the waters will wish to forget the closed season, especially if their boat was uninsured. Storm damage can occur in the back garden as well as the Caribbean, and mice have been known to enjoy nibbling at sails.

Indeed, insurers are still dealing with a stream of claims from owners who are only just realising that boats left stored at boat clubs were damaged in the gales this January and February.

The real nightmare is discovering that you are also about to pick up a bill from other parties. A broken mooring could lead to contact with several other boats. Even dinghies left on land can damage others in the same row if they are blown over.

The case for having at least third-party liability cover to safeguard against negligently causing damage to other people's boats is obvious enough. While it is not actually compulsory it is becoming increasingly difficult to avoid. Most marinas and harbour authorities insist on it, and all boats seeking a licence to sail on British Waterways - responsible for over three-quarters of Britain's inland waterways - must have at least pounds 1m of cover.

Many specialist yacht insurance brokers and underwriting agents now offer "third party liability only" cover as a low-cost alternative to comprehensive policies (which cover damage to a policyholder's own boat in addition to third-party liability.)

The Basic Boat Liability Company, which operates a scheme underwritten by Independent Insurance, is unusual in concentrating exclusively on third- party liability cover. It is especially competitive for boats between 25ft and 65ft in length, for which it provides pounds 1m of cover at a flat rate of pounds 45 a year.

For boats under 25ft it charges a flat pounds 30 a year. This can be competitive in some cases, but is well above the minimum premiums of some other players. Newton Crum, for example, can insure a Mirror dinghy for pounds 2m of third- party liability cover for only pounds 12.

Comprehensive policies normally cover against theft, accidental or malicious damage and standard marine risks such as sinking, standing and storm damage. Costs can be anything between 0.4 per cent and 1 per cent of the value insured for boats sailing in UK or continental waters.

In most cases owners find the extra protection provided by comprehensive cover worth the extra cost. The chief exceptions are when boats over 20 years old are involved. These normally require a survey - which can cost several hundred pounds - and owners do not always consider the costs worth paying.

Most cover for anything other than small boats (under five metres) is bought through specialist insurance brokers which are able to select the most appropriate cover from a number of insurers and help ensure that everything runs smoothly in the event of a claim.

This expertise in vetting the suitability of policy wordings is particularly useful in a field where it is notoriously difficult to compare like with like. Some leading specialist brokers are detailed in the table above.

Richard Langford, managing director of Noble Marine Insurance Brokers, says: "Talking to members at your sailing club is a good way of gleaning information about brokers. Invariably their recommendations are worth a lot, especially with regard to claims handling where standards can vary markedly."

GJW Direct, which sells yacht insurance directly to the public over the telephone and does not pay commission to intermediaries, provides the main alternative to the specialist brokers. It claims to undercut brokers by up to 30 per cent, but it admits that average savings in practice are more like 10 to 15 per cent. The specialist brokers dispute GJW Direct's claim to undercut them at all, and some emphasise that they will be prepared to match any prices it quotes.

Boats under five metres long rarely require advice from a specialist broker. Owners who are members of a class association should not have to look further than the insurance scheme this offers. Rates are normally highly competitive and application forms straightforward.

Non-class association members may find their household contents policy has a pleasure-craft extension, probably offering no-frills comprehensive cover at a reasonable price - usually between pounds 50 and pounds 100 a year - but excluding racing risks.

Smaller boats are particularly vulnerable to theft and insurers strongly recommend that owners make use of Boatmark, the marine industry's national identification scheme. Some offer premium discounts to users.

The scheme is designed to deter thieves and help members recover boats or equipment. Boats registered with it have clearly visible markings to act as a deterrent and at least one marking which is carefully concealed. Details of boat, owner and equipment are held on a central database linked to the Police National Computer.

Until recently one of the disadvantages of Boatmark was that owners had to take boats to a special marking station. However, a new DIY approach was launched at the Earl's Court Boat Show in January. For pounds 30 owners can obtain an easy-to-use kit which imprints the necessary markings in around 30 minutes - for details, phone 01722 413346.

A home on the water, page 9

Yacht insurance specialists

Name Type of organisation Type of cover

Noble Marine Insurance broker Comprehensive,

01636 707606 third party liability only,

small boat schemes

Admiral Marine Insurance broker Comprehensive,

0800 526983 small boat schemes

KC Powell Insurance broker Comprehensive,

01702 470035 third party liability only,

small boat schemes

St Margarets Insurance broker Comprehensive,

Insurances third party liability only,

0800 0180012 small boat schemes

Newton Crum Underwriting agent Comprehensive,

01424 718800 third party liability only,

small boat schemes

The Basic Boat Underwriting agent Third party liability only

0181 4775055

GJW Direct Direct insurer Comprehensive

0500 141141