A Detailed Guide to Boat Insurance

Sep 23, 2021

Boat Insurance

A Detailed Guide to Boat Insurance
While your boat affords you adventure and recreation, it is susceptible to various risks, including, among others, fire, theft, and third-party liability claims. For instance, in 2019 alone, the U.S. recorded 4,168 recreational boating accidents that led to $55 million of property damage, 2,559 injuries, and 613 deaths.  One way to protect your boat from such the financial risks of boating accidents is to carry the right boat insurance. Here's a detailed guide to boat insurance.

How Can You Best Protect Your Boat?

  • The standard homeowners policy, as well as renters insurance, covers small crafts. Most insurers offer limited property damage coverage for small boats, including powerboats with 25 miles per hour maximum engine capacity. The coverage typically includes boat trailer and motor. Liability coverage is usually not included, but you can add it as an endorsement to your homeowners policy.
  • For faster and bigger vessels, e.g., yachts and personal watercraft like jet skis, you require a separate boat insurance policy. The standard boat insurance typically covers medical payments, property damage, and theft, with altering deductibles. You may choose to include optional coverage for boat accessories and trailers. Boat insurance policies generally offer broader liability protection compared to a homeowners policy.

Variants of Boat Insurance Coverage Available

There are two main variants of boat insurance, with different premium costs and different parameters:
  • Actual Cash Value Coverage

    The insurer factors in depreciation when calculating replacement costs with this type of boat insurance. Total losses are settled based on the boat's current market value (boat pricing guides are used to estimate your vessel's market value). In case of a partial loss, you'll receive the cost of the repair less the cost of depreciation).
  • Agreed Amount Value

    with these policies, your vessel's valuation is hinged on an amount you've agreed upon with your insurer. In case of partial loss, your insurer will replace the damaged items with new ones.
Other coverages include:
  • Physical loss/damage to the vessel

    It covers machinery, furnishings, fittings, machinery, and permanently attached equipment. However, certain exclusions to physical damage coverage could include any general wear and tear, damage caucused by insects, mold damage, animals (such as sharks), zebra mussels, and machinery damage or defective machinery.
  • Bodily injury to everyone else on board other than you or your family
  • Boat theft
  • Damage to other people's property
  • Trailer and boat accessories
  • Medical payments for any injuries to you and your passengers
  • Guest passenger liability – legal costs incurred by an individual using your vessel with your permission
  • Towing in case of an accident
  • Theft or loss of belongings may be covered in some cases. Some homeowners policies provide some coverage. You should specifically ask your insurer whether their policy covers the special equipment in your boat, like fishing gear.

Factors That Impact the Cost of Boat Insurance

The cost of boat insurance policies is hinged on various factors, including, among others:
  • The value of your boat
  • Boat category, age, and length
  • Engine type
  • The location you boat in
  • Place of anchorage
  • Your level of boating experience
  • Your claims history
  • Condition of boat
  • Primary residence (Is your boat your primary residence?)

Discount and Money-saver Ideas for Boat Insurance

Some of the strategies you can use to lower your boat insurance costs include:
  • Bundling policies, for instance, auto and boat insurance.
  • Completing boating and safety courses.
  • Owning a diesel-powered boat.
  • Not having made an insurance claim for some years.
That's everything you need to know about boat insurance. Contact our experts at Fuller Insurance Agency today for a boat insurance policy that suits your budget and adequately protects your vessel.
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