Boat Insurance Valuation FAQ: Setting the Sum Insured
Answers to boat insurance valuation questions: setting the sum insured, documenting equipment, comparing agreed and market value and updating your records.
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The sum insured is the number that decides what you are paid and, on most marine policies, is also the base the premium is calculated from. Setting it badly costs money every year or costs a great deal once.
These answers cover how to arrive at a defensible figure, how to evidence it, and how to keep it current.
How do I work out what to insure my boat for?
Start from recent sales of genuinely comparable boats — same model, similar age, similar specification, sold in Australia — then adjust for this vessel's condition, equipment and any recent major work. Add the gear that goes with the boat but is not part of the base model, and sanity-check the total against replacement reality.
- Find three to five recent Australian sales of the same model and similar age.
- Adjust for condition, hours, and the state of the rig, sails and machinery.
- Add electronics, ground tackle, sails, dinghy and outboard that are not in the base specification.
- Check the total against what replacing the boat would actually cost you today.
- Write down the workings, and keep the comparables.
Comparable sales are the evidence base an insurer and an assessor will both use, so building your figure the same way makes it defensible rather than aspirational. Asking prices are not sales; they are the starting point of a negotiation.
Work through the sum insured calculator for a structured version of this, and the sum insured guide for how insurers treat the figure.
Covered in depth: Boat Sum Insured Calculator · Boat Insurance Sum Insured: Choosing Your Vessel Value · Agreed Value vs Market Value Boat Insurance
How do I choose between agreed value and market value?
Choose agreed value where the vessel is unusual, appreciating, recently refitted or hard to compare — a classic, a timber boat, a one-off or a heavily equipped cruiser. Market value suits a common production boat with a liquid second-hand market. The difference is invisible until a total loss, when it decides the settlement.
Under an agreed value the figure on the schedule is what is paid on a total loss. Under a market value the insurer pays what the boat was worth immediately before the loss, which is assessed after the event and can be argued.
The agreed value versus market value guide works through the practical difference, and total loss claims shows where the distinction actually bites.
Covered in depth: Agreed Value vs Market Value Boat Insurance · Total Loss and Constructive Total Loss Boat Claims · Classic Yacht Insurance Australia
How do I evidence a value for an unusual or one-off boat?
Commission a valuation from a qualified marine surveyor and support it with build records, refit invoices and any comparable sales that exist. For a one-off, a home-built or an imported vessel, the surveyor's valuation is usually the only evidence base available, and insurers will generally want it to be current.
Keep the underlying documents, not just the valuation certificate. Build specifications, yard invoices and refit records are what let a later surveyor confirm the figure rather than start again.
Marine surveys covers the types of survey and what each produces, and imported yacht insurance deals with vessels with no Australian sales history.
Covered in depth: Marine Surveys and Boat Insurance Australia · Imported Yacht Insurance in Australia · Steel Yacht Insurance in Australia
How do I insure the gear as well as the boat?
List the equipment that is not part of the base vessel and check how the policy treats each category. Sails, electronics, ground tackle, the dinghy and outboard, and personal effects are commonly handled under separate limits, and a total sum insured that quietly assumes the base boat leaves those short.
On a well-equipped cruising yacht the gear can be a substantial share of the total value, and it is the part most often underinsured because it accumulated over years rather than being bought at once.
Marine electronics, tender and outboard and personal effects each cover how those categories are limited.
Covered in depth: Marine Electronics Insurance Australia · Tender and Outboard Insurance Australia · Personal Effects on a Boat: Insurance Cover
How do I keep the sum insured current as values change?
Review it at every renewal against fresh comparable sales, and adjust after any major refit, repower, new sails or significant electronics upgrade. Two things drift in opposite directions: a production boat depreciating, and replacement cost rising. Reviewing annually keeps you out of both traps.
Being over-insured on a market-value policy usually just means paying premium on value you will never recover. Being under-insured can mean an underinsurance adjustment on a partial claim as well as a shortfall on a total loss.
The renewal guide covers the annual check, and the sum insured calculator makes the recalculation quick.
Covered in depth: Boat Insurance Renewal: Value, Use and Policy Checks · Boat Sum Insured Calculator · Boat Insurance Sum Insured: Choosing Your Vessel Value
How do I value a boat after a major refit?
Document the work with invoices and photographs, then have the vessel revalued rather than simply adding the refit cost to the old figure. Refits rarely add their full cost to value — a repower or new rig adds more than cosmetic work — and an insurer will want the valuation rather than the arithmetic.
The refit file matters twice: it supports the higher value now, and it evidences the age and condition of major components at claim time, which is exactly what a rigging-age or machinery-condition argument turns on.
Boat modifications covers declaring structural and systems changes, and maintenance records covers keeping the file.
Covered in depth: Boat Modifications and Insurance · Boat Maintenance Records and Insurance Claims · Marine Surveys and Boat Insurance Australia
How do I avoid being underinsured on a partial claim?
Insure for the full value rather than for what you think you could bear to lose. Many marine policies apply an average or underinsurance provision, which reduces a partial claim in the same proportion the vessel was underinsured — so halving the sum insured can halve a repair payment, not just cap a total loss.
This is the mechanism owners are most often surprised by, because the logic of 'I'll insure it for less and accept a smaller payout' does not survive contact with an average clause.
Check how your wording expresses it — the sum insured guide explains the provision, and the PDS guide shows where in the document to find it.
Covered in depth: Boat Insurance Sum Insured: Choosing Your Vessel Value · Product Disclosure Statement Guide for Boat Insurance · Boat Sum Insured Calculator
How do I value a boat with very few comparable Australian sales?
Widen the evidence base deliberately: overseas sales of the same model adjusted for the Australian market, sales of closely related models from the same builder, and a surveyor's valuation that reasons from construction and specification rather than from comparables. Then document the reasoning, because the insurer will test it.
Boats in this position are usually imports, small-series builds or models that sold in tiny numbers here. The absence of comparables is itself a fact the insurer needs to know about, not something to paper over.
Imported yacht insurance covers vessels brought in from overseas, and older yacht insurance covers boats old enough that the market has thinned.
Covered in depth: Imported Yacht Insurance in Australia · Older Yacht Insurance Australia · Marine Surveys and Boat Insurance Australia
How do I insure a boat for more than I paid for it?
Evidence the gap. A bargain purchase, a deceased estate, a distressed sale or a boat bought needing work can genuinely be worth more than the price paid — but an insurer will want a survey valuation or comparable sales showing it, because a sum insured well above a recent purchase price is a standard fraud indicator.
The honest version of this is common and perfectly insurable. Say what you paid, say why it was below market, and provide the valuation. Concealing the purchase price is what creates the problem.
Buying a used boat covers the purchase-to-policy sequence, and marine surveys covers getting the valuation.
Covered in depth: Buying a Used Boat: Insurance Australia · Marine Surveys and Boat Insurance Australia · Boat Insurance Disclosure: Duty Not to Misrepresent
How do I work out the value of a catamaran for insurance?
Use catamaran comparables only. Multihull values, repair costs and depreciation curves behave differently from monohulls, and a catamaran carries two of most systems. Base the figure on recent sales of the same model and account for the full equipment list, then check it against what a yard would charge to repair a bridgedeck or a damaged hull.
Catamaran repairs are constrained by hardstand and travel-lift capacity as much as by labour, which is part of why insurers assess them separately from monohulls.
Catamaran insurance covers the underwriting differences and catamaran insurance cost covers the pricing method.
Covered in depth: Catamaran Insurance Australia · Catamaran Insurance Cost Australia: Factors and Quotes · Best Catamaran Insurance Australia: Cover and Eligibility
How do I document value so a claim is not argued?
Build a file and keep it ashore: purchase documents, the most recent survey and valuation, refit and service invoices, an equipment inventory with serial numbers, and dated photographs of the vessel inside and out taken at the start of each season. That file is what converts your view of the value into evidence.
- Scan the purchase contract, transfer papers and any finance documents.
- Add the most recent survey and valuation.
- Build an equipment inventory with makes, models and serial numbers.
- Photograph the exterior, interior, rig, engine bay and electronics each season.
- Keep service and refit invoices in date order.
- Store the whole file somewhere that is not on the boat.
The photographs do double duty. They evidence the equipment fit and they establish pre-loss condition, which is the other half of every marine claim.
The claim checklist lists what an insurer typically asks for, and maintenance records covers how to keep the file usable.
Covered in depth: Boat Insurance Claim Checklist · Boat Maintenance Records and Insurance Claims · Marine Electronics Insurance Australia
How do I know if my boat is a constructive total loss?
It is the insurer's call, made when the cost of repair plus recovery approaches or exceeds the vessel's insured value, or the agreed threshold in the wording. You can influence the inputs — the repair quotes, the recovery cost and the valuation evidence — but not the designation itself.
The threshold matters because it decides whether you receive a settlement and lose the boat, or receive a repair. On a boat you value beyond its market price, that is not a neutral outcome.
Total loss and constructive total loss covers how the calculation is done and what happens to the wreck, which is a separate question with its own costs.
Covered in depth: Total Loss and Constructive Total Loss Boat Claims · Salvage and Wreck Removal Insurance · Agreed Value vs Market Value Boat Insurance