Can you get Insurance on a Salvaged Boat?

A salvaged boat is one that has previously been declared a total loss by an insurance company due to significant damage, often from accidents, natural disasters or severe neglect.

Despite this, many people are drawn to salvage boats for their affordability and potential for restoration. However, can you get insurance on a salvaged boat?

Let’s discuss whether it's possible to insure a salvaged boat and provide some guidance on how to go about it.

Understanding salvaged boats

Salvaged boats are vessels that have been classified as a total loss by an insurance company. They’ve usually sustained a lot of damage from collisions, fire, mechanical breakdowns, natural disasters or simply being left to rust.

A boat is regarded as a total loss when the repair costs are higher than the Boat insurance policies can be either ‘market value’ (based on the current market value of the boat, taking into account age, wear and tear, and general condition) or fixed at an agreed replacement value for the boat.

Owning a salvaged boat presents risks such as structural issues, hidden damage and difficulties obtaining insurance. Even though they come with some challenges, salvaged boats are still very appealing as they come with lower costs and huge potential as restoration projects.

Challenges of insuring a salvaged boat

Insuring a salvaged boat is often more challenging than insuring a new or used vessel. Insurance companies have concerns about the boat's structural integrity, safety and the quality of repairs.

These factors can lead to increased risk, making insurers wary. As a result, premiums for salvaged boats are typically higher, and coverage options may be limited.

Insurers may require detailed inspections and documentation of repairs before offering coverage. Once over these hurdles, though it will take more effort and expense.

Types of insurance for salvaged boats

Insuring a salvaged boat involves understanding the various types of coverage available and how they apply to these unique vessels.

Liability insurance 

This type of cover can be hugely beneficial to any boat owner. It can cover accidental damages and injuries caused to others while on board due to negligence on your part. It can be especially useful for salvage boats, where there are concerns about accidents. It can provide protection against any resulting legal defence costs.

Comprehensive insurance

A more extensive kind of coverage that safeguards against accidental damage, theft and vandalism caused to the boat. For salvaged boats this insurance can be limited, but it is important to have a buffer like this to protect against unforeseen events beyond collisions.

Agreed value versus actual cash value policies

Agreed value policies pay a predetermined amount in case of a total loss, while actual cash value policies only pay up to the value of the boat at the time of its loss or damage. The latter also considers depreciation, damage and wear and tear based upon a marine surveyor’s report. For salvaged boats, agreed value policies might be more suitable due to their more unpredictable market value.

Restoration and repair coverage

This insurance covers costs associated with making a salvaged boat seaworthy. It helps manage expenses during the restoration process, ensuring that the boat can safely return to the water.

Steps to obtain insurance for a salvaged boat

To ensure you have the right coverage in place for a salvaged boat, follow these steps.

Thorough inspection 

Make sure your salvaged boat undergoes a detailed survey by a marine surveyor to assess structural integrity and safety. The boat has to be safe in order to gain insurance approval.

Document repairs and modifications

Keep detailed records of all work done. This documentation acts as proof of the boat's condition, aiding in insurance applications.

Consult specialised insurers

Seek insurers who are experienced with salvaged or high-risk boats. They can help provide tailored coverage and guidance on selecting the right policy.

Negotiate coverage and terms

Understand policy details and any exclusions. Negotiate terms to ensure full protection that aligns with your specific needs.

Is your boat covered? 

Insuring a salvaged boat requires thorough documentation of repairs and modifications, a detailed inspection by a marine surveyor and consultation with specialised insurers.

Boat insurance from Towergate

It might be a bit more work, risks of your salvaged vessel. You can safeguard against unforeseen challenges by getting a boat insurance quote from us today either online or by phoning us on 0344 892 1987.

 

About the author

Adam Summersby is a respected leader with 11 years’ varied experience in niche personal and commercial lines insurance, including caravan, site operators and excess reimbursement, with proficiency in leadership, sales and account management.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.