Many home insurance policies provide partial coverage for watercraft, but if you want to to fully protect your boat, you need boat insurance. The maximum that most homeowners policies pay for watercraft is $1,500.
Watercraft liability is another important coverage that most likely is not covered by your homeowner’s policy. This coverage provides financial protection should your boat damage another person or their property.
If you have a canoe, kayak, or another small boat, your insurance professional can confirm if your homeowner’s policy is sufficient for your risk and use. However, recreational boats usually require additional coverage, particularly if they travel at speeds greater than 25 mph. Recreational boats are those under 27 feet.
Note that both yachts and personal watercraft require different insurance than recreational boats.
Smart coverage
The typical boat insurance policy provides liability protection for bodily injury and medical expenses, property damage to others, and any injuries or losses caused by people you give permission to drive your boat. It also insures against damage or losses due to collisions, fires, lightning, vandalism, and theft. This includes the boat and any permanently attached standard equipment. The boat includes the hull, machinery, fittings, and furnishings.
However, typical boat insurance doesn’t include:
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Normal wear and tear
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Defective machinery or failure due to lack of maintenance
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Damage from wildlife, including sharks, insects, or zebra mussels
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Damage from mold
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Damage from ice or freezing
Depending on your situation, you may also want to add coverage for trailers, expensive accessories, towing, uninsured boaters, or carry-on equipment such as fishing gear.
Policy particulars
Every policy has important details you need to understand. Ask your insurance professional about these limits and coverage features:
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Navigational limits: Are you limited to specific territory or waterways? What should you do if you want to take your boat outside these areas? Boats used on freshwater inland lakes are typically less expensive to insure than those used on the ocean.
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Marine inspections: Is there a certain model year for which a marine survey is required? Even if your boat is not an older model, you may still want a survey to confirm its value.
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Underage operators: What are the age and license requirements set by the insurance company?
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Equipment: As mentioned, most policies include fittings, furnishings and permanently attached equipment. However, you should verify this list against your expectations. Check on the coverage related to anchors, oars, trolling motors, tools, seat cushions, life jackets, and expensive items onboard.
In addition, you must select which type of policy you want with regard to claim expectations. There are two types of boat insurance policies: actual cash value policies and agreed value policies. To better understand these two options, here are the general definitions:
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Actual cash value (ACV): Claims are paid based on replacement cost, minus depreciation. If your boat is a total loss, your payment will be determined based on used boat pricing guides or other resources. Partial losses are paid based on the cost of the repair, minus a percentage for depreciation.
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Agreed value (also called “stated value”): Claims are paid based on a valuation you and your insurance company agree to at the time the policy starts. Total losses are paid out at this value. Partial losses are settled without any deduction for depreciation.
To determine the right policy for you, compare the cost of premiums and the levels of risk you feel comfortable assuming. If you prefer the protection afforded by an agreed value policy but find the premiums a bit stiff for your budget, you can reduce the premium by adjusting the deductible you are willing to pay.
Savings discovered
There are other ways to reduce your premiums, too. Ask your insurance professional about discounts for having:
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A diesel fuel engine, which is considered less hazardous than a gasoline-powered engine
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Coast Guard-approved fire extinguishers
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Ship-to-shore radios
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Completed safety courses
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Multiple policies with the same insurer, including home, auto or umbrella
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Two or more years without a claim
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A good driving record
Review this discount list every time your policy renews.
Don’t get caught high and dry
It may be tempting to suspend your boat policy when your watercraft is in storage or out of the water. However, your boat can still suffer damage year-round due to fire, vandalism, theft or even winter storms.
While you don’t want to end coverage, you can consider what’s called a “lay-up” policy during the off season or periods of inactivity. This reduces your coverage without eliminating it entirely. It maintains protection for risks that still exist during storage or time out of the water, but it temporarily suspends coverage for on-water risks, such as collisions, wreck removal, or uninsured boaters.
If you have a lay-up policy, you must adhere to the proposed calendar guidelines. If you take your boat out even a day before the lay-up policy stipulates, you will not be covered for any losses.
Contact us for help with the particulars of watercraft coverage and any discounts available to you.
Choosing the right insurance agent is one of the most important decisions you will make. The Turner Agency, Inc. is a local Trusted Choice® independent insurance agency headquartered in Greenville, South Carolina. Serving the Upstate of South Carolina and beyond since 1962, we offer a variety of business and personal coverage choices and can customize an insurance plan to meet your specialized needs.
The information in this article was obtained from various sources and is not all inclusive regarding the subject matter. This content is offered for educational purposes only.
