This month’s newsletter is highlighting some components to be aware of when re-assessing your Leisure Craft Policy and the Sum Insured values to ensure your craft and its equipment is adequately insured. Come claim stage, Insurer settlements might differ based on how your Sum Insured values have been determined on your current policy.
What is meant with the basis of Indemnity?
‘Indemnity basis’ is the amount of money that an insurance company will pay for a risk, based on what is written in the policy. This means that damage or loss may be paid in full or in part depending on the terms of the insurance contract.
What external influences have an impact on the basis of Indemnity?
• Fluctuating Exchange Rates
• Increased Repair Costs
• Inflationary Pressures
It is highly recommended to note the following when determining your Leisure Craft Sum Insured Value:
Leisure Craft Hull
The Policy is based on new replacement value and the Replacement value shall mean:-
• In respect of vessels not exceeding 4 years in age at the time of loss or damage: The new replacement value.
• In respect of vessels older than 4 years in age at the time of loss or damage:- The reasonable market value.
It is recommended that Special Equipment should be more specifically described under a separate sum insured which should represent the current replacement value including VAT.
What is considered to be Special / Other equipment in terms of the Policy? It includes, inter alia:
• boating, yachting or crew’s clothes and other specified personal effects;
• diving and fishing gear, water-ski’s, ski-ropes and other sports equipment
• food, fuel and other stores, lifebelts and medical kit;
• binoculars, sextants, fish finding and similar equipment;
• nautical books, maps and navigating equipment;
• radar, radio, television and electronic equipment.
• Boat cover and other accessories.
If Leisure Craft special equipment is not specifically described or insured under a separate Sum Insured, the following will apply:
• in the event of a claim, the general excess will be applied as opposed to the lower excess of 10% of claim, minimum R250.00 and could result in the claim falling within the excess on the policy and not being paid.
In respect of sailing vessels, the Masts, Spars, Sails and Rigging sum insured should represent current replacement value including VAT.
As always, AIB Cape remains at your service.
admin October 30, 2019
Posted In: Newsletters