Baltic Sea storm surge: Are boat owners better insured these days?

The Baltic Sea storm surge of 20–21 October 2023 left behind destroyed port facilities, damaged boats and wrecks that were costly to salvage. Three years on, the question arises as to what lessons insurers and shipowners have learnt from this.

According to the yacht insurance broker Pantaenius, the disaster has not led to any fundamental changes in the cover on offer. It is primarily organisational preparedness that has been further developed. According to the company, when extreme weather is forecast, it coordinates with specialist partners at an early stage regarding salvage capacity, technology and potential operations.

Third-party liability cover does not replace comprehensive cover

Immediately after the storm surge, several major insurance brokers had agreed to to settle insured claims in accordance with the terms and conditions. The decisive factor here was the type of contract the owners concerned had entered into.

Boat third-party liability insurance generally provides cover against valid claims for damages made by third parties. It does not cover damage to your own boat. For that, you will need suitable comprehensive insurance. This The difference between boat third-party liability insurance and comprehensive boat insurance This becomes particularly important if a neighbouring boat breaks free. Its owner is generally only liable in the event of culpable conduct. If he has secured his boat properly, there may be no claim for damages.

Comprehensive insurance policies also vary. A policy covering total loss only generally does not cover repairable partial damage. Whether storm surges, flooding and consequential damage are covered is determined by the relevant terms and conditions.

Salvage costs may exceed the value of the boat

Particularly in the case of older motorboats, the market value says little about the potential financial risk. A boat that has taken on water may need to be lifted, removed and disposed of using specialist equipment. This work may cost more than the boat is still worth.

Owners should therefore check whether salvage, wreck removal and disposal are expressly included. It is equally important to ascertain whether these services are available in addition to the sum insured or whether they are deducted from it. Maximum limits may restrict the cover.

Even an official order does not guarantee that costs will be covered. Following the storm surge, the city of Kiel had the Order given to salvage damaged and sunken ships. Whether a standard third-party liability insurance policy provides cover in such a situation depends on the claims covered by the policy and the specific circumstances.

Older boats need a suitable policy

A low boat value does not automatically mean that repairs will be cheap. Repairing an engine, replacing damaged electrical systems or carrying out work on the hull can quickly result in a total economic loss.

The key factor, therefore, is the relationship between the boat’s value, the premium and the financial risk that the owner can bear themselves. Other factors to consider include age-related deductions for repairs, excesses and the binding nature of an agreed fixed valuation. A Comparison of insurance terms and conditions provides a more meaningful insight than simply looking at the post itself.

The harbour master does not replace your own precautions

Whilst Pantaenius recognises that boat owners have developed a greater sense of responsibility, it still sees areas for improvement. “Many boats are used at the weekend and then left inadequately prepared and secured,” says Dirk Ammann.

Suitable mooring lines, sufficient fenders and secured covers are all part of the preparations. When water levels are high, the lines must allow sufficient upward movement without losing their holding capacity. Anyone who is unable to get to their boat at short notice should arrange for a reliable stand-in. Owners should not rely on the harbour master to carry out a comprehensive inspection of every boat.

If extreme weather is forecast, it is important to check well in advance whether the mooring remains suitable or whether the boat can still be moved to a safer location or brought ashore in good time.

Five questions to ask your boat insurer

• Are storm surges and flooding covered by comprehensive motor insurance?
• Are partial claims covered, and what age-related deductions apply?
• Are salvage and wreck removal covered in addition to the sum insured?
• Is the agreed sum insured still appropriate for the boat and its equipment?
• What duties of care and specific conditions apply to winter storage in water?

Have you made any changes to your insurance cover since the 2023 Baltic Sea storm surge, and which policy details were the deciding factors in this?