Boat Insurance

During the summer boats are an extremely popular activity for families. However, do you know if your boat has the proper insurance coverage?

Did you know that your homeowners or renters policy typically provides some small boat coverage? The coverage is very limited – it covers property damage only, can only be used on boats with less than 25 mile per hour horse power, and coverage is usually limited to $1,000 total for you boat, motor, and trailer. Liability coverage is not included, but it may be added with an endorsement.

Larger and faster boats such as personal watercraft such as jet skis and wave runners require a their own separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage.

For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment as part of either an actual cash value policy or on an agreed amount value basis.

Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.

Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.

Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals (such as sharks), zebra mussels, defective machinery or machinery damage.

Boat insurance also covers:

Bodily injury—for injuries caused to another person
Property damage—for damage caused to someone else’s property
Guest passenger liability—for any legal expenses incurred by someone using the boat with the owner’s permission
Medical payments—for injuries to the boat owner and other passengers
Theft

Most companies offer liability limits that start at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.

Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.

Boat owners should also inquire about discounts for the following:

Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
Coast Guard approved fire extinguishers
Ship-to-shore radios
Two years of claims-free experience
Multi-policies with the same insurer, such as a car, home or umbrella policy
Safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.

If you would like to receive an insurance quote on your boat, please fee free to contact our office.