Hull Insurance - Inclusion, Exclusion & Claim Process

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Hull Insurance

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Marine hull and machinery insurance is essential for shipowners and operators. It provides coverage for physical damage to the vessel and its machinery. This type of insurance is important for the financial stability of maritime ventures. 

 

What is Hull Insurance?

Marine hull insurance is a type of insurance that covers physical damages to vessels and boats used for commercial or private purposes in the maritime industry. It is designed to protect shipowners from the financial burden of repairing or replacing their vessels in the event of damage. 

Marine hull and machinery insurance is particularly relevant in the UAE as the maritime industry in this region spans a wide range of activities like shipping, transport of goods, offshore exploration, and leisure activities such as yachting and boating.

 

Who Should Buy Hull Insurance?

Hull insurance, sometimes referred to as boat hull insurance, is essential for various sectors and owners of specific types of vessels in the UAE. 

Given below are the groups that should consider purchasing marine hull insurance:

Sectors:

  • Ship Repairers
  • Freight Forwarders
  • Hauliers
  • Stevedores
  • Ports and Terminals

Owners of the Following Vessels:

  • Owners of ships
  • Owners of cargo vessels
  • Vessels
  • Yachts
  • Pleasure crafts
  • Other types of vessels used for commercial or private purposes

Inclusions of Marine Hull and Machinery Insurance UAE

Marine hull insurance policies provide a range of coverage features that protect vessel owners from various risks. 

Although the features largely depend on the type of insurer and policy, you can explore some regular inclusions of marine hull insurance below:

  • Hull and Machinery: This covers physical damage to the vessel's hull and machinery. It includes repair costs for damages caused by collisions, grounding, or other perils of the sea.
  • Disbursement, Increased Values, and Excess Liabilities Risks: It covers additional expenses and increased values beyond the primary hull and machinery policy. This includes financial protection against excess liabilities that may arise due to unforeseen circumstances.
  • Loss of Hire: Loss of hire insurance compensates the vessel owner for lost income if the vessel is out of service due to damage. This helps in maintaining financial stability during repair periods.
  • Protection and Indemnity Risks: This coverage protects against third-party liabilities, including injury to crew members and passengers, and damage to other vessels. It may also cover pollution liabilities and legal defence costs.
  • War Risk: This provides coverage for damages and losses caused by war-related events. The list usually includes acts of war, terrorism, strikes, and related perils.
  • Pleasure Craft: Designed for yachts and other recreational vessels, this insurance covers physical damage, liability, and personal accident risks. 
  • Marine Liability: It protects against legal liabilities arising from vessel operations. This includes coverage for collision liabilities, environmental damage, and wreck removal costs.
  • Kidnap and Ransom: This coverage offers financial protection against kidnapping and ransom demands. It includes costs for ransom payments, crisis management, and related expenses.
  • Builder’s Risk Insurance: Builder’s Risk Insurance covers vessels under construction or undergoing significant modifications. It protects against damage or loss during the building process. 

Exclusions of Marine Hull Insurance in UAE

Marine hull insurance in the UAE generally does not cover the following:

  • Normal wear and tear of the vessel
  • Damage due to mechanical or electrical breakdown
  • Losses caused by war, nuclear incidents, and radioactive contamination
  • Damage resulting from the owner's intentional acts
  • Claims arising from the vessel being unseaworthy at the start of the journey
  • Pollution damage, unless specifically included
  • Costs for repairs not authorised by the insurer
  • Losses resulting from illegal activities
  • Damage caused by crew negligence
  •  Indirect or consequential losses

Factors Affecting Marine Hull Insurance UAE

The sum insured is the value of the hull, which must be determined and agreed upon by an independent and qualified marine surveyor. 

Here are the factors that influence marine hull insurance premiums in the UAE: 

  • Type of Hull: The material and construction type of the hull (e.g., steel, aluminium, fibreglass) impact the insurance premium. Different hull types have varying vulnerabilities and maintenance costs.
  • Tonnage: Tonnage indicates the vessel's size and potential risk exposure. The vessel's gross tonnage affects the insurance cost — larger vessels generally have higher premiums.
  • Fleet or Singleton: Whether the vessel is part of a fleet or operates independently can influence premiums. Fleet policies might offer discounts due to the spread of risk across multiple vessels.
  • Trade of the Vessel: The vessel's trade or operational area affects risk assessment. For instance, vessels operating in high-risk areas or engaging in dangerous trades typically face higher premiums.
  • Ownership or Management: The reputation and experience of the vessel's owner or management team can impact insurance costs. Well-managed vessels with reputable owners often receive better rates.
  • Classification: The vessel's classification by recognised maritime classification societies influences the insurance terms. Higher classification standards usually lead to lower premiums due to perceived lower risks.
  • Valuation of the Vessel: Accurate and agreed-upon valuation by a marine surveyor ensures appropriate coverage. Overvaluation or undervaluation can lead to inadequate coverage or higher premiums.
  • Past Loss History: The vessel's history of claims and losses significantly impacts insurance rates. A clean loss history generally results in lower premiums, while frequent claims can increase costs.
  • Insurance Condition Offered: The terms and conditions offered by the insurer, including deductibles and coverage limits, affect the premium. Tailored insurance conditions can provide better risk management and cost efficiency.

Claim Process of Marine Hull Insurance in UAE

While the claim process for marine hull and machinery insurance in the UAE varies as per the insurance company, the process usually involves these steps: 

  • Registration on the Insurer’s Online Website: Most insurers provide digital registration for claims. You have to log into the insurer's website and submit the initial claim form with relevant details about the incident.
  • Acknowledgment: After the claim is registered, the insurer will acknowledge receipt of the claim. This acknowledgment often includes a reference number and details on the next steps in the process.
  • Request for Information or Documents: The insurer may request additional information or documentation to support the claim. This can include photographs, incident reports, repair estimates, and other relevant documents.
  • Review: The insurance provider will review the submitted claim and documents. This step involves checking the extent of the damage and verifying the details of the incident.
  • Validation and Approval: Once the review is complete, the insurer will validate the claim so that it meets the policy terms and conditions
  • Payment: Upon approval, the insurer will process the payment for the claim. The payment may cover the cost of repairs or replacement as per the policy coverage. The amount is usually transferred directly to the policyholder or the repair facility.

 

Documents Required for Marine Hull Insurance Claim Settlement Process

For the settlement of a marine hull insurance claim in the UAE, the following documents are generally required:

  • Completed and signed claim form
  • Copy of the marine hull insurance policy
  • Report from an independent and qualified marine surveyor
  • Detailed report of the incident leading to the claim
  • Photographic evidence of the damage
  • Quotes or estimates for the cost of repairs
  • Proof of expenses related to the damage
  • Relevant entries from the vessel's logbook
  • Statements from the crew present during the incident
  • Report from the port authority, if applicable
  • Police report, if the incident involved criminal activity
  • Records showing the vessel’s navigation at the time of the incident
  • Any relevant correspondence related to the claim

How to Buy Marine Hull Insurance in the UAE?

For the best marine insurance plans, you can head to Policybazaar.ae. This platform offers a variety of marine hull insurance policies from top-notch insurers. 

Here are some key advantages of buying marine hull insurance UAE through Policybazaar.ae:

  • Policybazaar.ae boasts a Google review rating of 4.6, based on over 18,000 reviews. 
  • The platform provides unbiased advice. This way, you can make informed decisions about the best insurance plans to suit your needs.
  • Obtain your policy in just a few taps and within minutes.
  • Policybazaar.ae helps you get the best value for your money by offering competitive insurance plans that meet your requirements.
  • Enjoy a broad selection of policies from leading insurers, giving you ample choices to find the perfect coverage.

 

Frequently Asked Questions

 

Q1. What is the main purpose of marine hull insurance?

Ans: The main purpose of marine hull insurance is to provide financial protection against physical damage to a vessel. It covers repair or replacement costs due to accidents and other covered perils.

Q2. Is marine hull insurance available for both commercial and private vessels?

Ans: Yes, marine hull insurance is available for both commercial and private vessels. This includes ships, yachts, pleasure crafts, and other types of maritime vessels.

Q3. How is the premium for marine hull insurance calculated?

Ans: The premium for marine hull insurance is calculated based on factors such as the type of hull, tonnage, trade routes, past loss history, and the vessel's valuation. Each insurer may have its own specific criteria.

Q4. Can I customise my marine hull insurance policy?

Ans: Yes, most insurers provide the option to customise your marine hull insurance policy. You can choose specific coverages and limits that best suit your needs and operations.

Q5. What should I do in case of a loss or damage to my vessel?

Ans: In case of a loss or damage to your vessel, you should immediately notify your insurer and provide all necessary documentation and information. This includes filling out a claim form, providing a survey report, and submitting any other required documents.

Q6. Are there any geographical limitations to marine hull insurance coverage?

Ans: Yes, marine hull insurance coverage can have geographical limitations. It’s important to review the policy terms to understand the covered navigational limits and any exclusions related to specific regions or waters.