Everything you need to know about Boat Insurance.
Insurance comes in many forms. You can protect your life, your home and other property, vehicle and even boats. Insurance companies have started providing protection for everything you can imagine. This helps you deal with anything that might cause a dent in your pocket.
Table of Contents
What is Boat Insurance?
Boat insurance provides coverage for your boat in case of any loss or damage. It covers watercrafts that have motors along with sailboats, leisure crafts, paddle boats, yachts, etc. However, it does not usually cover canoes, kayaks or personal watercrafts.
You might be able to find limited coverage for small watercrafts under your homeowners policy. You can either buy separate coverage or add a special endorsement.
What is Covered Under Boat Insurance?
Boat insurance coverage provides protection against all losses and damages you can incur on your boat. It covers the following:
- Collision damage. This covers repair and replacement of your boat. However, it may not include clean-up of wreckage unless you purchase additional optional coverage.
- Property damage liability. It provides coverage for any damage you might cause to someone else’s property, boat, a dock or other building structures.
- Bodily injury liability. This protects you against injuries you might have caused to someone else while using your boat. It includes pain and suffering, medical bills, lost wages and legal expenses.
- Comprehensive.This provides coverage in case your boat has been stolen, vandalized or damaged in an accident other than collision. It also provides coverage for destruction caused by natural disasters.
- Additional coverage options which include roadside assistance, oil spills, fishing equipment, medical payments, personal property and damages or injuries caused by other boaters who are uninsured or underinsured.
The amount of compensation you receive depends on how much your deductibles are, whether your boat insurance covers your boat’s actual cash value, replacement cost or agreed upon value as well as your coverage limit.
Besides the basic coverage provided for your boat, you can also opt for additional coverage options like:
- Specialized coverage which is mainly for something specific on your boat like expensive navigation equipment.
- Salvage coverage that pays to remove your boat in case of damage which can either be substantial or minor.
- Consequential damage which covers damage caused by the everyday wear and tear instead of an accident. This includes rot, molt, corrosion, etc.
- Towing your boat can be a pretty costly process.
- Cruising extension is provided as additional coverage add on if you plan on leaving the country.
Types of Boat Insurance
There are two main boat insurance types:
- Actual cash value policy which cost less upfront. However, they tend to factor in depreciation. Which means the policy will only pay you what your boat’s actual cash value policy is at the time it is declared a total or partial loss. This insurance policy is usually insisted by insurers when your boat has aged and they do not want to pay you something that your boat is not even worth anymore.
- Agreed upon value policy focuses more on the boat’s value when the policy was written which means there is no depreciation for a total loss of the boat. However, it does cost more upfront.
How Boat Insurance Claims are Filed
Boat insurance requirements for a claim does not usually require you to have proof of insurance with you on the boat. However, it is always advised to keep claim documents handy in case of an emergency.
When you are looking for policies, it is important to ask questions about how the claims are filed and what the process is. Once you know what the process is like before you even have bought the policy, the entire process of filing for a claim, should you ever need to, will become fairly quick and easy. Your insurance broker or agent can also help you deal with the aftermath of filing a claim. However, you would need to make sure that they will not just request a check and leave but will help you with the towing and salvaging if it comes to that.
Cost of Boat Insurance
The underwriter responsible for determining the rate of premiums charged for a boat insurance policy has to keep a lot of factors in mind. However, the most common factors that determine how much the premium would be are:
- Age, length and value of the boat.
- Type of boat.
- Type of engine.
- Intended area of navigation.
- Previous boating experience and claim history of the owner.
- Deductible amount.
Sometimes underwriters also take the owner’s automobile driving record into consideration just to check whether or not they tend to to take safety precautions. Moreover, whether the owner has taken any safe boating courses or not also plays a role in determining what the boat insurance premiums would be. It is a general rule when it comes to insurance that the higher the level of risk you are, the higher your premiums would be. This goes for any kind of insurance. If you are a reckless driver, you are likely to get into more accidents than an average safe driver. Insuring you would be risky for any insurance company which is why they charge high premiums to cover that risk. Similarly, if you have a hobby of skydiving, you are more likely to die from an accident or malfunction which is why life insurance companies will charge you high premiums in order to provide you insurance.
In line with that provision, if you do not have proper boating training or are a reckless sailor, you will be more likely to have higher premiums to pay. If you want cheap boat insurance, the best way would be to prove to your underwriter that you are not a high risk candidate. You can do so by taking profession boating training or other safe boating courses.
There are a few other ways to make sure your boating costs are low. For example, you can opt for deductions for winter layup if you live in an area where boating is restricted by seasons and spends more of its time in storage than on water.
Many insurers also tend to offer discounts for candidates that have good driving records or for candidates who have completed boater education classes. Moreover, it generally costs less to be insured in fresh water versus salt. However, not many insurance companies might do that which is why you should speak to your insurance agent before mistakenly assuming your insurance company will be charging you less and then being surprised when the bill for the premium is at your doorstep.
If you have homeowners insurance along with automobile insurance from the same company, you might be able to get a discount on buying boat insurance and bundling your coverage options. This way you will be able to earn a little extra savings without having to start a risky new relationship with boat insurance companies that you do not have prior experience with.
However, a rule of thumb. Before deciding which insurance company to buy your policy from, it is important to determine what your needs are. What is something you cannot compromise on and what is something that will not help you? Once you have determined that, it would be easier for you to know how much your boat insurance policy is going to cost you. With that knowledge, you can easily look around and shop to see what fits your budget while providing you with all the coverage you need. You may use the help of a boat insurance calculator available on most boat insurance websites to help you determine what your costs would be.
You can also choose to buy a boat insurance package that can save you some money. Companies like Nationwide and Progressive boat insurance offer a wide range of packages catering to different types of boaters. For example:
- You can get coverage up to $1,000 for fishing equipment if you choose to take gear onto your boat and remove it when you are finished. You can also get $3,000 for personal effects as well as $500 for towing.
- It is possible to get coverage up to $2,500 for fishing equipment, $2,500 for towing and $5,000 for personal effects if you decide to spend the weekend or take short boating trips.
- Light Tackle Anglers. This is if you own a bass or a smaller fishing boat. You will be able to get coverage for fishing equipment up to $5,000, $2,000 for personal effects and $2,500 for towing.
- Deep Water Pros. If you usually fish big waters, bays, gulfs and oceans, you will be liable for coverage up to $10,000 for fishing equipment, $2,500 for towing and $5,000 for personal effects.
Roadside assistance is usually included at no additional cost when a boat trailer is also insured with your boat. You may also be able to add rental reimbursement as optional coverage to any boat insurance package.
The Bottom Line
The bottom line is, now that you know what is covered under boat insurance, it is easier to make a decision about whether you even need it and if you do, you know how to make sure you get the cheapest option available. Whether it is by proving to the insurance company that you are a low risk candidate or by making sure you avail the discounts and the best boat insurance packages so that you have everything you need but in a cost-effective way.