Don't let ill winds maroon you

The annual Southampton Boat Show, which starts next Saturday, is expected to attract a record number of visitors - yet again. Taking to the water, on anything from a windsurfer to an ocean-going yacht, is an increasingly popular sport.

"Our membership has been increasing steadily for years and years," says Mark Howell of the Royal Yachting Association. "The sport's been perceived as a bit of a posh yacht club, G&T, old chaps kind of thing but in fact it is very democratic."

Chris Knox-Johnston, of Haven, a Lloyd's insurer, agrees. "There are 88,000 boats on the inland waterways. Over 5 per cent of the population goes boating in one way or another. It ain't a rich man's sport."

But this aquatic enthusiasm is not confined to innocent boat owners and sailors. Thieves have found rich pickings: pounds 15m of craft and equipment was stolen last year, according to GJW Direct, an insurance firm.

The other dangers come from the elements, other boaters and from themselves. Take, for example, the true claims story told by Dennis Mossman, of Navigators & General, the Eagle Star-owned market leader in boat insurance. A single- handed yachtsman who sailed his boat on to the rocks went into the cabin to dig out a rocket-style distress flare, lit the flare while still in the cabin, and promptly burnt the boat down. Navigators paid the insurance claim.

Disaster stories apart, boats are a relatively good risk, as far as insurers are concerned. "There are proportionately far fewer boating accidents than car accidents," said David Young of British Waterways, the regulator. Tighter controls on boat security and increased competition have also driven down premiums. "Rates have halved in the last few years, it's a very, very competitive market," says Mr Knox-Johnston.

All of which makes a good case for cover. Indeed, for thousands of owners of powered boats on canals, rivers, reservoirs and other inland waters, insurance cover will be compulsory from January. Regulations being brought in by British Waterways and the Environment Agency, principally to reduce the risk of fire and explosions, will require most inland boats fitted with cookers, heaters, refrigerators or lights to pass an annual safety check. The owners will also have to have at least pounds 1m of third-party liability insurance, which covers damage to other people and other boats.

A standard boat insurance policy will include this cover anyway. But some owners who will be required to have cover will not want to pay for a standard policy because the value of their boat is much the same as, or even less than, the insurance premium. They are being targeted by the Basic Boat Liability Company in London, which offers a policy underwritten by Independent Insurance giving third-party cover only. Premiums start at pounds 30 a year.

Most boat owners who want insurance, however, will want more comprehensive cover. It pays to choose the policy carefully. Premiums vary a lot and comparing policies can be difficult. Some of the added costs may not be obvious. An apparently cheap yacht policy may, for example, require you to get the boat surveyed every five years, at a cost of, say, pounds 400 a go. Similarly, some policies will cover you for standard yacht club racing at no added cost and without increasing the excess while you are racing; others will not.

The range of possible discounts on offer also varies. As well as a no- claims bonus of up to 25 per cent, you may, depending on the insurer, get discounts for things like keeping your boat out of the water during the winter, mooring it at a secure marina, having RYA sailing qualifications, or fitting secure locks on the boat.

Do not assume a broker will do the required shopping around for you. While a good broker will recommend a suitable policy and point out the limits and exclusions on it, it may not be the best value policy you could get. That is because "most reputable brokers and underwriting agents are tied to one main insurer. It is a specialist industry and it would be administratively difficult to have ties to more than one insurer," explains Chris Collidge, of Collidge & Partners, a marine broker in Margate, Kent.

Having said that, there are only around 10 insurers offering cover and only three of these (Navigators & General, Haven Yacht Insurance and GJW Direct) specialise in this area. So calling round a few brokers for quotes should give you a good feel for the range. The insurance will also depend on the type of boat you have:

Dinghies. Most general insurers will add basic cover for a standard dinghy to a house contents policy for a small, or no, added premium. Alternatively, you could try a more comprehensive stand-alone policy, where premiums start at around pounds 50 a year. There are some generally cheap schemes for specific classes, such as GP14s.

Canal or narrow boats. These are generally seen as a good risk. As the table illustrates, the premiums do not vary greatly. However, not all insurers will offer cover if the boat is being used as a houseboat.

Speedboats and motor-cruisers. The premiums vary a lot, depending on factors such as the type and age of the boat (and owner) and where you are going to keep it.

Yachts. Again, there are a lot of factors that affect the premiums. "Check any policy carefully to see what the requirements are. There are bound to be restrictions on, for example, the areas you can go cruising in and where you can moor it," advises a General Accident spokesman.

Navigators & General and Haven Yacht Insurance can be contacted through local branch offices of brokers General Accident; GJW Direct is on 0500 141 141.