Jet ski insurance explained

What is jet ski insurance?

Jet ski insurance is also known as PWC insurance (personal watercraft insurance: a type of boat or marine insurance). Canstar has reviewed a number of jet ski insurance policies to explain how this kind of insurance may provide cover if your jet ski is damaged, destroyed, or stolen. We also break down how to protect yourself against liability claims if your jet ski causes damage to other people or their property.

What types of jet ski insurance are available?

When it comes to jet ski insurance, the exact levels of cover will vary depending on the provider. Some of the most common types of marine insurance in Australia are:

• Third party property and liability insurance covers damage to someone else or their property caused by your jet ski.
• Third party fire and theft insurance covers damage to someone else or their property caused by your jet ski, and additionally covers your jet ski from fire damage and theft.
• Comprehensive insurance covers damage to someone else or their property caused by your jet ski; or damage to your jet ski caused by events such as fire, theft, accidents (and in some cases, natural disasters and vandalism).

What does comprehensive jet ski insurance cover?

Comprehensive jet ski insurance may provide cover for the following:

• accidental damage to your jet ski caused by fire, storm, flood, vandalism, or an accident.
• theft or attempted theft of your jet ski.
• accidental damage to your jet ski caused by a collision with an uninsured boat, jet ski, aqua scooter or other PWC (where the party at fault does not have insurance).
• injury to you or your passengers caused by an accident with an uninsured boat, jet ski, aqua scooter or other PWC (includes medical payments).
• third party damage to other vessels caused by your jet ski.

What extras may be available with jet ski insurance?

Specialised cover is available from some insurance providers who may allow you to add optional extras to your jet ski insurance policy such as:

• contents insurance for personal belongings stored in your jet ski (accessory insurance)
• total loss replacement
• emergency towing if you need it
• 24/7 assistance for jet ski trailer and jet ski towing
• wreckage removal costs after a collision or other accident
• lay-up cover, with your insurance premium reduced if the jet ski is put into storage and left unused for a certain period of time.
• environmental damage repair after a collision or other accident
• cover for your jet ski trailer

Adding one or more optional extras to a policy may increase the premiums you pay in some cases, and not every insurance provider may offer the same set of optional extras. So make sure you check with them first and read the product disclosure statement (PDS) and target market determination (TMD) to confirm what can be added to any particular policy.

What exclusions can apply to jet ski insurance?

Jet ski insurance can only cover you to ride within the allowable geographic areas shown on your certificate of insurance. Each state and territory has heritage areas or other protected areas in which you cannot ride your jet ski, or where restrictions apply to how you can operate it. Contact your insurance provider or visit your local marine department’s website for more information:

• ACT: National Capital Authority
• NSW: Roads & Waterways; Transport for NSW
• NT: Marine Safety Branch; Department of Infrastructure, Planning and Logistics 
• QLD: Maritime Safety Queensland; Department of Transport and Main Roads
• SA: Boat and Marine Safety; Department for Infrastructure and Transport
• TAS: Marine and Safety Tasmania
• VIC: Maritime Safety Victoria, Transport Safety Victoria
• WA: Department of Transport

Other exclusions that may be specified include:

• Jet skis may have to be registered as a PWC with your local department of transport.
• You may be required to store your jet ski securely.
• Your policy could be voided if the person operating the jet ski at the time of an incident has not obeyed local laws.
• Depending on your state or territory, you may also need a specialised licence to drive a jet ski (a personal watercraft licence) or a PWC endorsement to your current marine driver licence.
• If your jet ski causes damage to other people or their property while attached to a trailer, it is typically excluded from jet ski insurance because the trailer is being towed by another vehicle. Some insurance providers may cover such an accident, but otherwise this is a matter for your car insurance. You may be covered if you have a sufficient level of comprehensive car insurance cover.

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What safety equipment is needed for a jet ski?

All passengers and drivers of a jet ski must wear a personal flotation device . The other safety equipment that you are required to wear or keep on board your jet ski depends on whether you are riding in smooth waters (e.g. lakes or dams), partially smooth waters (e.g. rivers and creeks), or beyond partially smooth waters (e.g. the surf).

Is jet ski insurance mandatory or optional?

At the time of writing, jet ski insurance is optional throughout most of Australia, if you only want to use your jet ski for personal leisure. Check with your state or territory authority (links are  above) for details. However, it could be a wise move to consider taking out a liability insurance policy to cover your legal responsibility if your jet ski causes injury to another person or damages their property.

If you buy your jet ski using a personal loan or other financing, your lender may require you to buy comprehensive jet ski insurance. Check the lender’s terms and conditions.

What does jet ski insurance cost?

The cost of jet ski insurance varies between providers and according to your individual circumstances. Your premiums will depend on whether you choose basic or comprehensive coverage and the market value of your jet ski (or how much you want to be covered for). The cost may also depend on factors such as:

• year, make and model of your jet ski
• horsepower, engine type and maximum operating speed
• how you use your jet ski
• any modifications made
• where you store it
• boater safety courses you have completed
• whether your jet ski is equipped with security features
• your driving record for both a car and a boat
• the amount of excess you are required to pay

How to compare jet ski insurance

Apart from the cost, factors to consider when comparing jet insurance policies include the coverage level you’d like, whether you want to insure your jet ski for agreed value or market value, exclusions that may apply and what excess you’d like to pay for the policy.

Coverage level

Finding the right policy for your needs will depend on the level of cover you are looking for. The level of coverage will differ between providers – so keep in mind not all comprehensive policies are the same. It is a good idea to talk to your insurer and read the policy’s PDS and TMD to work out whether it provides the right level of coverage for your needs.

Agreed value vs market value

Insurers will often offer to cover your jet ski at its current market value (which will decrease over time with depreciation). However, some insurers may also give you the option of insuring it at an agreed value (how much you and the insurer agree it is worth). Terms and conditions such as increased premiums may apply if you choose this option, so make sure to read the PDS and TMD or speak to your insurance provider for details.

Exclusions

It is a good idea to be aware of exclusions that apply to your policy, as well as what you are covered for. This way, you can ensure you’ll be covered for your usual watercraft activities. For example, if you are into jet ski racing, it is a good idea to look for a policy that specifically includes racing activities, as many policies may exclude racing from coverage that’s offered to policyholders.

Excess

When you make a claim, you may also have to pay an excess. This is an amount that you are required to contribute towards the cost of repairs or replacements when you make a claim. Some providers will allow you to have a higher or lower excess included in your policy, but this may impact the cost of your premiums.

How can you buy jet ski insurance?

There are generally two ways to buy jet ski insurance:

1. a stand-alone jet ski insurance policy
2. adding your jet ski as a PWC to an existing boat insurance policy for an additional cost

There are a range of insurers that offer both types of insurance in Australia. It could be a wise idea to obtain a number of quotes and compare features, costs and coverage before making a decision. Be sure to read all the important documents carefully, including the PDS and TMD, and if you don’t find the answers you are looking for, ask the provider for more detail.

Cover image source: VladyslaV Travel photo/Shutterstock.com