Purchasing a pleasure craft is always an exciting time and, in many cases, it will be one of the largest purchases in many people’s lives. If you take out a loan to assist with the purchase, then it can also be a major liability.
Careful consideration should be given to protect your pride and joy in the event of an unforeseen event or circumstance. When the vessel is used as a security for the loan, the lender will require you to take out a comprehensive insurance cover. Regardless of whether you borrow money for the purchase or pay cash, you really should seriously consider taking out this type of cover for your own peace of mind.
Basically, this type of policy covers the theft or accidental loss or damage of your boat. The policy can also cover other risks such as liability to other people. Before purchasing a policy from an insurer, make sure you obtain a copy of the Policy Disclosure Statement (PDS). This document will give you all the information you will need to know about the policy – what is covered and what is not. So take the time to read it carefully and ask questions if you are unclear about anything.
When the boat is taken as security for the loan, the lender will require the insurer to note them as an interested party on the policy. They do this so they are made aware of any insurance claim that is deemed a total loss and the insurer elects to payout the policy rather than repair the boat. Being an interested party, the lender needs to agree to the payout to release the boat, and would normally require the funds to be paid back onto the loan.
Further, when taking out a loan to purchase your boat or jet ski, consideration should be given to also taking out a Loan Protection Insurance (LPI). LPI can take care of your loan repayments for each month that you are unable to work due to an accident or illness. And will keep paying them until you are fit to return to work or the loan is paid out. LPI can also provide cover for involuntary unemployment.
In most cases, the cost to take out these policies can be added to the loan and cover you for the term of the loan. These types of policies have become more affordable in recent times. Our finance specialists at Credit One are able to arrange LPI cover.
The team at Credit One are authorised agents of Club Marine, and are happy to provide an obligation free insurance quote, whether you are financing your boat or paying cash.
So give us a call today on 1300 Credit (1300 273 348) or visit us online: www.boatloansfinance.com.au or email: bo***@cr*******.au
IMPORTANT: Before taking out any insurance cover, obtain a copy of the PDS. Note that it will contain general financial product advice that does not take into account your personal financial circumstance.
