If you’re a boat owner, you probably cherish every memory you make out on the water. That in itself is a great reason to protect you and your vessel with the right boat insurance. If you’re also like most boat owners the thought choosing insurance for your boat gives you angst. Now while there are several things to consider, securing boat insurance doesn’t have to be confusing, difficult or time consuming. Follow these simple suggestions and you’ll be out on the water in no time. And while we certainly understand the draw of Glimmerglass (the sunlight dancing on the water’s surface), your safety is nothing to be hasty about. Take the time to get the boat insurance that will give you peace of mind for a safe and awesome boating season.
What You Should Know When Buying Boat Insurance
You Need Boat Insurance! (Your Boat is Not Covered by your Auto and Homeowners Insurance Policies)
Whether or not you actually need boat insurance is a common area of confusion. While your auto insurance does cover your boat while you’re traveling with it on land and it’s hitched to your vehicle, it does not cover your boat when it’s on the water. Along that same line, your homeowners insurance only covers your boat for damage done to it while it’s on your property. However, when your boat is out on the water, your homeowners insurance will usually only cover a small boat, or at most a boat with a small engine, and only in certain waterways. It also doesn’t ordinarily cover salvage work, wreck removal, or pollution and environmental damage.
How Boat Insurance Works
Just like your auto insurance, boat insurance covers you for the damage your boat may do to others, their boats and docks. It also covers for damage done to your own boat by others or the environment. In addition, it covers the theft of your boat or theft of its contents (i.e., specialty gear), vandalism, fire and flood. Some policies also cover you for towing.
Just like your homeowners insurance, boat insurance covers you for injury to others while they are on your boat, and it also offers you replacement cost or cash value in the event of damages.
Boat insurance differs from your auto and homeowners insurance in a few ways. Unlike the other two policies, boat insurance can be suspended while your boat isn’t in use. This is a smart way to save money during the off season. Boat insurance also covers permanently attached items like motors, navigational equipment, anchors, and oars.
Picking the Right Agent
It’s well worth putting some time and effort in upfront when it comes to finding the right agent for you. And when you talk with one, be sure to thoroughly discuss your needs. You may wonder why you need to put so much time into this step. The answer is that it’s not fun suffering a loss and then having to haggle over discrepancies in an insurance policy. That being said, make sure the agent is very familiar with boats and boating, they’re connected with well-respected marine insurer companies, and they’re providing you with advice that is reasonable and applicable to you and your boating needs.
Understand Agreed vs. Market/Actual Cash Value of Your Boat
Although we like to think our boats are priceless, like cars, they experience a decrease in their worth as soon as we put them on the water. Worse yet, they just continue to decrease with time. That being said, when you and your agent agree on a policy, you need to decide whether, in the event of your boat being partially or completely destroyed, you want to be reimbursed an “agreed value” or a “market/actual cash value.”
What’s the difference? The more expensive of the two is the agreed value, which is what you and your agent decide your boat is worth at the time you purchase insurance. It should be the amount it would cost you to replace it with like kind and quality. The market/actual cash value is the real value of the boat in its “lifespan” at the time of the incident. While you might get more money back for damages with agreed value, insurers may steer you toward market/actual cash value, which could provide savings at the time you purchase the policy.
Things That Can Affect Policy Cost
Right off the bat, there are several things that can affect the cost of your boat insurance policy:
· Where you plan to cruise:
o Inland or coastal
o Freshwater ($) or saltwater ($$$)
o In-country or out-of-country
o Specific locations out-of-country
· Your storm plan
o What you plan to do with your boat in the event of a storm significantly affects your policy. For instance, when you’re aware of a significant storm coming, is it your plan to have your boat stored in a secure facility or towed to a safer location? But remember, if you expect to be covered for damage done during a storm, you must follow the agreed upon plan.
· The insurance agency you choose
o If the agency you already use for your auto and homeowners insurance is also a reputable boat insurer, you can bundle your policies and get significant discounts.
· Things that qualify you for discounts
o Previous boating training and certifications - so, if you haven’t already, take a course!
o A good driving and boating record
o Proper and additional safety equipment and fixtures
How Much Does Boat Insurance Cost?
Factors like the age of your boat, boat type, boating history, coverages, and location all play a part in calculating your boat insurance rate. The average cost of a boat insurance policy is generally $200 to $500 annually, according to Trusted Choice, an association for insurance agents. As you can imagine, a superyacht is going to be far more expensive to insure than a lake pontoon. Though most policies run in the hundreds annually, the cost increases with the value of the boat and any added risk.
Unfortunately, no matter how careful and seasoned a boater you may be, accidents happen. And although boat insurance can’t take away the upset of a boating accident, it is something to fall back on and can do a great deal toward making you whole again. So, get your policy in place and enjoy some peace of mind along with the sun and cool breezes!
Written by: Jo Montgomery