Multi policies can mean multi expensive

December 7, 2018

IT is common for some companies to offer significant ‘multi policy’ discounts in an effort to secure your boat insurance business, simply because you might insure your house and car with that same business.

But don’t assume that the promise of a 20 percent saving is always your best deal. Specialist marine insurer Nautilus Marine advises there are many factors to consider. The first is the discount itself. As a simple example, a 20 percent reduction off a $300 purchase is not as cheap as a 15% reduction off a $250 purchase. In the first instance you save $60 and in the second you save $37.50. But overall, the price you pay with that original 20 percent discount is now $240, while the price paid with a 15 percent discount is $212.50.

It’s a little like when a shoe store offers you a second pair of shoes at a 50 percent discount. If both pairs are the same retail price, your overall savings are 25 percent, but for many people it is the 50 percent figure that sticks in their mind and influences the purchasing decision. Similarly, a marine tradie charging $120 an hour who completes the project in one hour works out to exactly the same price as one who charges $60 an hour but takes two hours to complete the job.

Likewise, when calculating your boat’s fuel consumption, the number of litres your boat is using an hour at a certain number of revs is immaterial unless you consider how far you travelled in that hour. Using twice as much fuel per hour to travel a given distance in half the time is the same as burning half the amount of fuel per hour and taking twice as long to get there. The bottom line is how many nautical miles (or kilometres) did you travel per litre (or for a larger vessel, how many litres did you use per nautical mile).

Likewise, when it comes to marine insurance you need to know the bottom line price after any discounts that do or do not apply – but more importantly, you also need to know what your policy is covering you for. Does the company trying to roll your boat insurance in with your car, house and contents insurance provide boat insurance coverage for a distance of up to 250 nautical miles offshore? Nautilus Marine does.

Does that multi-policy insurance discount mean your boat will still be covered when it is stored at a holiday destination? If not, that fishing trip to Tweed Heads might be a lot more expensive than it would have been at Noosa Heads. Are your marine electronics including, sounder, plotter, radio and other expensive equipment covered under the policy? Do you have full replacement costs for your boat covered during the first 12 months? At what point does your insurance move from ‘agreed value’ to ‘market value’?

A good insurer should be able to answer all these questions immediately and know where they are referenced in the product disclosure statement (PDS). As a specialist marine insurer, Nautilus employs a team of consultants who solely deal with marine-related insurance matters. They know the specific scenarios, they know the fine details of what is and what is not covered. It’s also why they frequently attend boating and outdoor shows – it provides an opportunity for boat owners to discuss real and hypothetical scenarios.

There is no room for ‘you should be right’ when it comes to insuring your boat, trailer, motor, electronics and fishing gear. When things go pear-shaped, it will all depend on what is in the marine insurance PDS. That’s why you are strongly advised to talk to a marine insurance specialist like Nautilus Marine who knows the PDS from front to back cover and who can show you exactly where the relevant clauses are. Special conditions and excesses should always be explained clearly in your insurance policy’s PDS.

Always check your PDS and if you have a query, ask for clarification. So before insuring your boat for the next 12 months, check out whether what you think you are covered for is actually the case and whether that supposed discount price is really a discount at all.

If you need further information, you can contact Nautilus Marine Insurance on 1300 780 533 for any boat insurance requirements.