Do You Have the Right Boat Insurance?

It is a fact that a large number of insurance companies that specialize in renter’s and homeowner’s insurance policies offer limited coverage for small watercrafts such as canoes, sailboats and power boats with a maximum speed of less than 25 miles per hour. In case boat insurance is included, the coverage amount is 10% of the house’s value or $1,000.  This coverage generally included the trailer and motor on top of the boat.  Third party liability is generally not included in a regular renter’s or homeowners’ policy but could be added as an option at extra cost.

For larger boats such as yachts, speedboats, fishing boats and personal watercrafts such as jet skis and wave runners, separate boat insurance is required. Factors that determine the cost of boat insurance are the size, type, value of the boat and the body of water where you run the boat. Damage or loss coverage includes the hull, fittings, machinery, furnishings and all permanently attached            equipment under an Agreed Amount Value or Actual Cash Value policy.  These are the two types of boat insurance policies which are better than a traditional homeowner’s policy.

Agreed Amount Value Boat Insurance Policy – Under the Agreed Amount Value insurance coverage, you and the insurance company have an agreed understanding on the actual value of your watercraft. In the event of total loss, the insurer will reimburse you of the agreed amount. This boat insurance policy also includes the replacement of broken or dilapidated boat parts without deductions due to depreciation.

Actual Cash Value Boat Insurance Policy -Under this type of insurance, the insurance company and you agree that you will be compensated for the total loss of your watercraft based on its current market value.  Replacement of boat parts is computed less its depreciation value at the time of the loss.

Excluded from physical damages in this type of policy are damages from:

  • defective or damaged machinery
  • insects
  • zebra mussels
  • animals
  • mold
  • normal wear and tear.

Third Party Liability for Boat Insurance includes bodily injury, property damage, guest passenger liability, medical payments and theft. Normally, boat insurance policy liability limit starts at $15,000. Based on the size, type, age and value of a boat, the liability limit could be increased to $300,000 up to $400,000. Deductibles are set at $1,000 for medical expenses, $500 for theft and $250 for damage to property. In case of additional gear or trailer, added coverage could be purchased. An umbrella liability policy to cover your car, boat and home is another option.

Discounts are available for boat owners for the following items:

  • diesel-powered boats
  • Coast guard approved fire extinguishers
  • Ship-to-shore frequency radios
  • two years of claims-free experience
  • multi policies under one insurer
  • Attendance on accredited safety education courses such as the ones offered by American Red Cross, U.S. Power Squadron and Coast Guard Auxiliary.

Boat Safety Tips

Each year recreational boating accidents happen by the thousands due to various factors. To thwart accidents, here are some safety tips for the care and protection of a watercraft:

  • Before heading out, check the weather forecast
  • Always tell someone where you are headed and your expected return time
  • Check the engine, steering and electrical systems, fuel and possible leaks
  • Always equip the boat with two or more appropriate fire extinguishers
  • Make sure the boat has navigational lights, whistle/horn/bell.
  • Equip the boat with first aid kit, water and food supply, tool kit and spare parts, flares, two-way radio, flashlight, paddle or oars

Ensure the safety of crew and guests by:

  • Making sure that everyone on board wears a life-jacket
  • Knowing and implementing accepted marine traffic laws and distress signals
  • Being on the alert for water hazards, other boats and swimmers
  • Implementing correct boat loads and loading of passengers
  • By not operating the boat if the driver is under the influence of drugs or alcohol