How to set your boat's insured value and excess

Insure the boat for its full value and choose an excess you can pay on every claim. Try your own figures in the policy pay calculator.

What happens if you insure your boat for less than it is worth?

You share every partial loss with the insurer. The Maritime Law says that if the sum insured is less than the true value, you are “self-insured for the difference” and bear a part of any partial damage equal to the ratio of that difference to the value.¹

Insuring for more than the value does not get you more: without fraud, the policy is valid only up to the true value.¹

Check your sum insured against a recent valuation every year.

How do you show the insurer what your boat is worth?

With documents. Al Buhaira says the value you choose “should be supported by suitable purchase documents, valuation information or a marine survey”, and lists a current valuation or marine survey report among the documents it asks for.² ADNIC’s proposal form asks for a separate value for the hull, the main engines, any auxiliary engine, the trailer and personal effects, and for any single personal article worth AED 500 or more to be declared.³ Union Insurance’s form asks whether the boat has been professionally surveyed in the last three years.⁴

Get a written valuation or survey, put a value against each item on the proposal form, and keep a copy of what you sent.

What is an agreed value, and why does it matter?

An agreed value is the boat’s value written into the policy and accepted by both sides. Under the Maritime Law, if the contract states the value of the ship, neither party may dispute it, except for general average or salvage claims. The agreed value covers the hull, engines and accessories.¹

GIG Gulf defines its agreed value as “the value of Your boat as declared by You and agreed by both You and Us”, and pays it for a total loss, or replaces the boat.⁵ Al Buhaira offers cover on an agreed-value or current-market-value basis.²

Ask which basis your quote uses. If it is market value, the payout for a total loss depends on what the boat is worth on the day.

When is your boat a total loss?

The law and the wordings use different lines.

The rows come from the Maritime Law,¹ Sukoon’s and Arabia’s wordings⁶⁷ and GIG Gulf’s handbook.⁵

If a repair estimate comes close to these lines, ask the insurer in writing which test it applies.

How does the excess work?

The excess is the part of each claim you pay. Under the Institute Yacht Clauses the claims from one accident must exceed the excess, which is then deducted; it does not apply to a total loss.⁶ GIG Gulf waives the excess for a total loss, and adds 20% to it for damage from hitting an underwater object under its Pleasure Craft handbook, or 15% under its Prestige Craft handbook.⁵⁸

One published policy, in a 2025 DIFC Courts case, had a sum insured of AED 1,365,000, a premium of AED 9,000 and an excess of AED 20,000 for each loss.⁹ It is one example, not a market rate.

A higher excess usually lowers the premium. Ask for prices at two excess levels.

Will the insurer pay new for old?

Not always. The Maritime Law lets the insurer deduct the difference between old and new parts unless the policy says otherwise.¹ The Institute Yacht Clauses allow a deduction of up to one third on protective covers, sails, running rigging and outboard motors.⁶ GIG Gulf may reduce a claim for age and condition on sails, covers, running rigging, outboard motors, batteries and personal belongings.⁵

Keep receipts and dates for sails, engines and batteries, so their age is clear at claim time.

The small print

• Maritime Law. Article 284 (over-insurance), 285 (under-insurance), 313 (agreed value), 318 (repairs and new for old), 319 (abandonment) of Federal Decree-Law No. 43 of 2023.¹
• Institute Yacht Clauses. Clause 12.1 (deductible), 12.2 (new for old) and 17.2 (constructive total loss).⁶
• Single items. ADNIC’s proposal form asks you to declare any single personal article worth AED 500 or more.³