What does boat insurance cover, and what does it leave out?
A boat policy pays for sudden, accidental damage to the boat, your liability to others and a small injury benefit. It leaves out wear, breakdown and some uses. Source
QuoteHub is a Tower partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.
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Boat insurance covers loss or damage to your boat and the liabilities you incur using it, as the Insurance Council of New Zealand describes personal pleasurecraft cover. Wear and tear and breakdown are excluded. Cover can also fall away if the boat is used or kept in ways the policy rules out.
Tower's wording is the worked example because QuoteHub is a Tower partner. Other insurers use different wordings, so every page reference below is to Tower's Boat Comprehensive wording. It insures the boat against "sudden and accidental physical loss" on land, on water, in storage or on its trailer, up to the lesser of market value and sum insured (pp. 4, 10).
What a comprehensive boat policy covers
A comprehensive boat policy covers sudden and accidental loss of or damage to the boat (Section 1), your legal liability to other people (Section 2) and a small accidental death and injury benefit (Section 3). Tower sells one boat policy, Boat Comprehensive, and each section has its own limits (Tower boat page).
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| Section | What it pays for | Limit in Tower's wording |
|---|---|---|
| 1. The boat | Fire, theft and other accidental loss | Lesser of market value or sum insured (p. 4) |
| 1. Rescue and emergency repairs | Rescue, removal to safety and essential repairs | Up to $25,000 an event, on top of the boat's value (p. 11) |
| 1. Recovery and storage | Recovery, 14 days' storage, hull inspection after a grounding, legally required wreck removal | The greater of $20,000 or 50% of the sum insured (p. 12) |
| 2. Liability | Your legal liability for property damage and bodily injury to others | $5,000,000 in total, with $100,000 for bodily injury to a person (p. 15) |
| 2. Pollution | Clean-up and damage from a sudden, accidental discharge of fuel, lubricants or sewage from holding tanks | $500,000 per event (p. 16) |
| 3. Accidental death or injury | Lump sum for death or a listed permanent injury | $5,000 for death plus $5,000 for funeral expenses; $5,000 for loss of sight in an eye or use of a limb; $1,000 for a thumb or index finger (p. 18) |
Smaller Section 1 benefits include 14 days of cover for a replacement boat you buy. You also get a new boat if yours is written off within three years of buying it new and insuring it with Tower (wording, pp. 11, 12). Liability also includes marina liability under a berth agreement and, with conditions, water-skiing (p. 17). For the full list, read what Tower boat insurance covers; for liability on its own, the boat liability guide.
What counts as "the boat"
Tower's definition of "the boat" is wider than the hull. It covers the motor, masts, spars, rigging and sails, emergency and safety gear, fixtures and chattels, and the boat's tender with its outboard (p. 35).
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Three things sit outside that definition unless you add them:
- the boat trailer, which needs the optional trailer benefit. Its tyres are covered only for malicious damage or alongside other trailer loss;
- fishing, diving and waterski gear, which needs the optional recreational equipment benefit and applies only if no other policy covers it;
- personal items belonging to you, your family or passengers, such as phones, cameras, clothing, watches, provisions and fuel, which are not covered (wording, pp. 7, 13, 14, 21).
Belongings aboard may fall under your contents insurance instead.
What boat insurance does not cover
A boat policy does not pay for wear and tear, gradual deterioration, mechanical or electrical failure, gradual leakage, loss of use or modifications Tower has not agreed. Tower's wording lists these as exclusions, with the page references in the table below.
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| Excluded | What the wording says |
|---|---|
| Wear and tear, osmosis, corrosion, delamination, electrolysis, fouling, mould, damage by marine life or birds, depreciation | Not covered, but only for the part first affected, not resulting damage elsewhere on the boat (p. 24). |
| Mechanical or electrical failure, faults and defects | Failure is not covered unless it happens because of a loss Tower has accepted, and the cost of fixing a latent defect or design or construction error is excluded (p. 24). |
| Gradual leakage | Gradual leakage of water into the boat (p. 22). |
| Motor, impellers and sails | A motor damaged by seizure or overheating is excluded unless an external blockage caused it. Jet unit impellers damaged by stones or other matter are excluded. Sail damage by wind or water is excluded unless the boat is stranded, sunk, in a collision or suffers mast or rigging failure (p. 21). |
| Loss of use, secondary and sentimental loss | Not being able to use the boat for reasons unconnected with a covered loss, secondary financial loss and sentimental loss are excluded (pp. 22, 23). |
| Improvements and unagreed modifications | The cost of improving or altering the boat is excluded, and so are modifications Tower has not agreed and noted on your certificate (pp. 7, 22). |
| Speed above 70 knots, communicable disease, cyber loss, war and terrorism | All excluded, with a narrow cyber exception for fire or explosion from a cyber incident that is not a cyber-attack (pp. 23, 24, 25). |
The liability section has its own list. It includes bodily injury where the Accident Compensation Act 2001 provides cover to any extent, injury to you or the person in charge, and a boat you are chartering or leasing (pp. 19, 20).
When a covered event can still go unpaid
A loss the policy would normally cover can still go unpaid if a condition is not met. In Tower's wording the conditions concern how the boat is used, where it is, how it is moored and operated, who is in control and when the policy started:
- Use. The boat is covered only for social, domestic or recreational use within New Zealand's geographical limits, and for volunteer marine rescue (p. 7). Business use, hire, charter and fare-paying passengers are excluded unless Tower has agreed and listed them. Racing is excluded apart from social yacht racing and races Tower has agreed and listed (pp. 13, 23).
- Place. Loss outside New Zealand's geographical limits, meaning waters up to 200 nautical miles off the North and South Islands unless your certificate restricts it, is excluded, bar emergencies (pp. 22, 37).
- Moorings. Losses arising from a mooring that is not suitably designed, sited, maintained and inspected out of the water are excluded. A boat on a temporary mooring, or anchored and unattended, needs its anchor and tackle checked by you going on board at least once in each 24-hour period (p. 22).
- Operation. Unsafe operation, such as overloading, setting sail when all advice was not to, or running an unseaworthy boat, is excluded (p. 21), as is a lack of reasonable care or security (p. 22).
- Who is in control. Cover does not apply if the person in control is unlicensed where a licence is needed or lacks adequate experience. It also does not apply if intoxicating substances contributed to the loss. A thief in control is the exception (p. 20).
- Timing. Storm, flood, wildfire, tsunami, volcanic activity and landslide are excluded within 72 hours of the policy start. So is a cyclone named before it. The exclusion does not apply if the policy follows straight on from one covering those risks or started when you bought the boat (p. 23).
- Other insurance. Tower does not pay for a loss you are covered for under another insurer's policy (p. 9).
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You must also tell Tower straight away if you change where or how the boat is stored, use it for business, modify it or add a regular operator (p. 26). Sailors can read the yacht insurance guide, and jet ski owners the jet ski insurance guide.
How a boat insurance claim works
Tell Tower as soon as a claim is likely and report theft or arson to Police. Take reasonable steps to prevent further loss, such as drying and flushing a submerged motor. Get Tower's permission before arranging repairs (pp. 6, 28). The Tower claims guide covers the process step by step.
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An excess applies to each event unless the benefit is excess-free. Extra excesses can apply to theft of trailered power boats and personal watercraft, racing, a boat in the care of someone under 25, and submersion of a trailerable boat on a temporary mooring (p. 30).
Repairs are paid at the least of repair cost, market value and sum insured, less reasonable depreciation, though a motor five years old or less is repaired without deduction for wear. In a total loss Tower pays the lesser of market value and sum insured, the boat and salvage become Tower's, and the policy ends (pp. 30, 31).
Getting a quote from Tower online
Have the boat's type, make, model, age, value, motor, trailer, storage place and drivers to hand. QuoteHub's link opens Tower's online quote, where you answer Tower's own questions. Cover is subject to Tower's current underwriting criteria (Tower boat page), and what a quote costs is covered on the boat insurance cost guide.
Questions people ask
What is comprehensive boat insurance?
It covers sudden and accidental loss or damage to the boat, plus liability and an accidental death and injury benefit. Tower's boat page describes Boat Comprehensive as paying market value or sum insured, whichever is less, when the boat suffers accidental loss (Tower boat page).
How does boat insurance work?
Does boat insurance cover theft?
Fire and theft of the boat are covered, including the motor and gear that form part of it (pp. 4, 35). The boat, safety gear and equipment must be securely stored and locked away when unattended (p. 26). For trailer craft, a $1,000 additional excess can apply to a total-loss theft from a trailer with no forced entry and no recognised anti-theft device (p. 8).
Does boat insurance cover a boat that sinks?
Submersion is covered if the boat is at its certificate mooring, or if someone physically checks it at least every 24 hours. The standard excess applies only if the boat has a working automatic bilge pump, a self-draining cockpit and adequate storm covers. Otherwise it is the greater of $500 or 10% of the sum insured (pp. 7, 8, 9). Gradual leakage of water into the boat is excluded (p. 22).
Sources
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Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931) · Reviewed quarterly, when the underlying data is restated. General information, not advice on your situation. Buying through Tower's online quote is direct, without advice. QuoteHub is a Tower partner and Smiths Insurance & KiwiSaver may receive a commission from Tower.
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QuoteHub is a Tower partner. Smiths Insurance & KiwiSaver may receive a commission if you buy. General information, not advice.
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