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What is Marine Insurance?

By Britt Archer
Updated May 23, 2024
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Marine insurance is a type of insurance that covers boats and ships, as well as their cargo and in some instances the places where the boat or ship is docked. It has a colorful history, beginning informally in England during the 17th century. In 1906, the Marine Insurance Act was passed under British law, creating a standard operating procedure for policies that dictates the world's policies to this day. The standards set forth by the act are considered reasonable, but due to changes in technology and social standards, the act is generally seen as obsolete and is being replaced by more modern legislature.

There are several varieties of insurance that can be taken out by a boat or ship owner. Marine cargo insurance covers whatever goods the boat is carrying. Inland marine insurance can be procured for floating vessels that are not ocean-bound, but travel primarily on lakes, rivers and reservoirs. There are also more general policies that cover the boat itself and its passengers, liability for damages to other moving vehicles and liability during an encounter with a non-moving object. These all fall under the heading of a marine insurance policy.

A private ship owner who uses his large boat for pleasure cruising in a marina may wish to take out inland marine insurance, as well as specialty yacht insurance. A merchant ship sailing in politically unsure waters may find it necessary to take out cargo insurance as well as a specific war policy that protects the boat and goods in the event of unfriendly actions. Marine insurance is often available through general insurance companies, and many car insurance dealers offer discounts to those who pay for more than one policy through their company. There are also dealers who work singularly in this area and only offer marine boat insurance. Policies can be broken down to cover only the boat, only the cargo, or both; most do not include coverage of objects on the boat that are not required for the ship's operation, such as computers, cell phones, or other types of valuables.

The rates of a marine insurance company vary depending upon the type of boat, size of boat, use of boat and the owner's current insurance history. Some policies may have stipulations on what they will and will not cover, and how much of the damages the owner of the boat is required to pay out of pocket. As with other types of insurance, it is almost always best to look at more than one policy before deciding on which to buy. Purchasers should be aware that the necessity for watercraft insurance varies by country and region.

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Discussion Comments

By watson42 — On Jan 21, 2011

@widget2010, while I'm sure marine insurance claims are the last things on the minds of people who get abducted, I imagine it is true that some people who do have problems in those areas, though not with pirates, might still have trouble getting damages covered.

By widget2010 — On Jan 19, 2011

Marine insurance services can get tricky for people who take their yachts and other boats out into international waters, especially since the problems of pirates have become worse in recent years. Yet another reason to heed any and all international travel warnings before going out on a boat.

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