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Here is what you need to know about boat insurance

Whether you own a boat or planning to buy one, it is imperative to get it insured. A good boat insurance will come to your rescue in case its stolen or damaged. You might be wondering, “Why do I need a separate boat coverage when my homeowner’s insurance plan can cover it?” The homeowner’s policy will usually only reimburse around $1000 or 10% of the home’s insured worth in case your boat is damaged. Also, the home owner’s insurance doesn’t involve liability coverage, i.e., cost to be paid, in case your boat causes injury to a person or their property. In simple terms, relying on a homeowner’s plan is only useful for people with small and inexpensive boats. Therefore, if you have a yacht, jet boat, big sailboat, watercraft or a boat that runs faster than 25 miles per hour, then you should consider getting a boat insurance.

Expenses included in a boat insurance plan
When it comes to liability coverage, the boat insurance can compensate anywhere between $15,000 and $300,000. However, this coverage range will vary across providers. Apart from liability expenses, here’s what boat insurance covers:

  • Destruction from theft, vandalism, collision, fire, and lightning
  • Medical costs of the boat owner and fellow passengers
  • Damage to the boat’s permanent parts
  • Guest passenger liability, i.e., reimbursement for the legal costs of other person driving your boat with your consent

Conversely, it doesn’t embrace expenses for usual wear-and-tear, damage caused by creatures such as sharks, machinery damage or defective machinery, and damage from insects, zebra mussels or mold. Likewise, not every insurance provider will offer supplementary coverage for accessories such as coolers or fishing equipment, trailers, towing and accidents caused by an uninsured boater. So, before you opt for a boat insurance, ensure to check if it meets your coverage requirements.

Types of boat insurance
Currently, there are two types of boat insurance, i.e., actual cash and agreed amount value.

  • Actual cash
    In this type of plan, the insurance company reimburses the value of the boat specified during the time of the damage. The provider is responsible for establishing its market value.
  • Agreed amount
    In case the boat is damaged, the provider will compensate the amount settled on while drafting the policy. If the boat can be repaired, the insurance company will replace the worn-out parts for the new ones without factoring depreciation deductions.

Agreed amount plans are comparatively more expensive than actual cash ones. However, it’s big upside is that it covers more than actual cash policies. Actual cash policies are affordable, but they are subject to depreciation, so the compensation you receive might not do justice to your original investment in the boat.

Although before you enroll in any type of policy it is crucial to remember some of these factors:

Navigational constraints
If you have a large boat or yacht, the insurance company will prescribe certain limits on where you can navigate your boat. If you travel outside the stated territories, then the policy might not cover any potential damages. Likewise, if you want a wider navigation area, you’ll have to pay higher premiums.

Layup periods
A layup period is when the owners take the boat out of the water during winters. Therefore, boat insurance providers offer discounts on the premiums during this season. However, if you take your boat out for a ride, the insurance company won’t provide any reimbursements, if any mishaps were to occur.

If you are buying a used boat model, then most providers will request you to get it reviewed by a marine surveyor for ruling out any defects, possible issues and for determining its current market value. In case, if a marine surveyor inspection is not mandated, it is still advised to get an assessment done to avoid any inconvenience later. You can seek the assistance of a marine surveyor from:

  • National Association of Marine Surveyors
  • Society of Accredited Marine Surveyors

Underage operators
At times, you might hand the boat controls to your kid. However, if your child doesn’t meet the eligibility criteria to operate a boat, then the providers won’t cover you. It is important to note that the age and license conditions vary across states. For instance, in Virginia, a child below 14 isn’t permitted to run a boat. Whereas, in Texas kids under 13 are forbidden to operate a boat without the guidance of a licensed individual who is at least 18. To know more about the eligibility, get in touch with your state’s boating regulatory agency.

Saving money on boat insurance
The insurance company will offer a good premium/deductible offer to you if:

  • You haven’t made a previous insurance claim
  • You have a diesel-powered boat
  • You have other coverages such as auto or homeowner’s policy from the same provider
  • You have taken safety courses

Popular boat insurance companies

  • Farmers
  • MetLife
  • Liberty Mutual
  • Hanover
  • Geico
  • Travelers
  • AAA
  • Country Financial
  • American Family
  • State Farm
  • USAA
  • Erie
  • The Hartford
  • Nationwide
  • Allstate
  • Auto-Owners
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