Boat Insurance: Benefits and Costs

Ultimately any type of insurance is just a risk management calculation. Marine insurance, like any other type of insurance, presents the boat owner with both benefits and some costs. The benefits are numerous and the key one's are often obvious to most, though a greater understanding about the benefits in technical insurance terms may not be quite as readily understood.


Indemnification is the key direct advantage of boat insurance. It is the indemnification for unexpected loss. Those suffering the loss are restored or at least moved significantly closer to their pre-loss position

Reduced Uncertainty

Prior to purchasing boat insurance, the boat owner fully bears the risk of possible damage to own vessel and is fully exposed to the liability for other boats and waterway installations. Therefore the other key benefit of boat insurance is the transfer of the obligation of liability to companies designed to withstand any claim i.e. the boat insurer, the obligation of which is usually purposely very high (either £2 million or £3 million for the standard Mercia Marine boat insurance policy). This gives ultimate peace of mind as no matter how serious or costly the incident, for example if a high value commercial vessel were to be involved, cover is still provided regardless of how low the cost of the boat insurance.

Insurance Costs

The huge size of the UK insurance industry suggests that on the whole, the benefits of insurance far outweigh the costs created by its existence. The extent to which we as boat insurers can reduce our costs has a direct implication on the extent to which we can expand into areas of greater specialism and the greater provision of boat insurance to UK customers (i.e. through reduced quotations). Greater provision also leads to greater economies of scale through which we can further lower quotations for the same quality of policy.

The key areas which we as an insurer are continually striving therefore to save costs is the automation of our business through greater IT integration and use of the internet. The internet is also key to ensuring we can increasingly reach our target audience, through improving our organic search engine result listings.

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