How to avoid being short changed

PREVIOUS columns in Bush ‘n Beach have detailed how as a boat owner, you may be held responsible for the costs of an environmental clean-up following a mishap involving your vessel.

That’s yet another reason why insuring your vessel is so important, irrespective of how careful you think you are on the water. But did you know that unlike specialist marine insurer Nautilus, some insurance companies will actually deduct that clean-up cost from the final payout figure for your vessel, leaving you short changed?

Let’s see how that happens:

Things take an unexpected turn while you’re out in the waters of a marine park. You and your crew manage to escape unscathed by being picked up by another boat, but unfortunately, your vessel and gear is now playing aquatic pinball on a rocky outcrop. Beside dealing with the loss of your vessel (which we will address in a moment), you also could be held responsible for containing and cleaning up the fuel and oil spills as well as removing debris including the boat’s battery, contents and the smashed hull itself.

Those clean-up costs ordinarily do not come cheaply, primarily because recovery vessels and equipment have to travel to the site of the misadventure and then deal with the clean-up in perhaps a very difficult working environment. And make no mistake, some statutory authority is going to demand that the wrecked vessel be removed – you’re not going to receive a ‘just forget it’ type of response.

Authorities recently engaged marine contractors who used a sling and a helicopter to lift the hull of a yacht at Tallebudgera Creek, as part of the recovery operations. The Queensland’s Government’s War on Wrecks Taskforce chair Kim Richards said: “Owners are responsible for the repair or removal of their damaged vessels from Queensland waterways.”

“Maritime Safety Queensland always seeks to recover the cost of salvage operations from the owners of wrecked or abandoned boats where they can be identified,” she said. “And, that helicopter-assisted salvage effort was no different.”

Maritime Safety Queensland’s web site states this about insurance:

“A recreational ship more than 15 metres in length, but less than 35 metres overall must have an insurance policy that provides $250,000 for pollution clean-up and $10 million for salvage and wreck removal.”

Even if your boat is 5 metres long and comes unstuck, expect to be paying for vessels, gear, divers, stand-by rescuers, environmental specialists, salvage crews and others. Let’s make some assumptions – your vessel was insured for a replacement cost of $40,000 and the clean-up bill came to $23,000. If you are properly insured with Nautilus, not a problem. Ordinarily Nautilus would pay the $23,000 clean-up bill and also pay you the $40,000 for the insured vessel.

That’s a total payout of $63,000. However, some other insurers would adopt an entirely different approach. They would deduct the $23,000 from your insured sum. That means the $40,000 agreed value of your vessel would be split $23,000 to the clean-up costs and just $17,000 to you. That’s a total payout of $40,000 and you’re already way behind the eight ball when it comes to replacing the boat.

(And while on the subject of insurance payouts, recovery and clean-up costs, if you are a four-wheel-driver, check whether your policy covers you for driving up the beach and what is and what is not covered if you get caught by an incoming tide to ensure you aren’t short changed).

As always, any special conditions and excesses should always be explained clearly in your insurance policy’s Product Disclosure Statement. Always check your PDS and if you have a query, ask for clarification. If you need further information, you can contact Nautilus Marine Insurance on 1300 780 533 for any boat insurance requirements.

Win a Nautilus Prize Package

Nautilus will also be answering your boat insurance questions of a general nature and will be offering a great, bi-monthly prize to the best questions received. The prize is a Nautilus Marine merchandising pack comprising a collapsible chiller bag, a handy marine sports bag and a cap. Just email your questions to: qld@nautilusinsurance.com.au

Any advice contained in this article is of a general nature only and may not apply or be right for you, it does not take into account your objectives, financial situation or needs. Before acting on any advice provided in this article you should consider the appropriateness of the advice having regard to your objectives, financial situation and needs. short changed short changed