Whether you own a boat or are looking to buy one, it’s a good idea to do your research on the extra costs that come with owning. The necessity of needing boat insurance seems to be a popular debate. Some might question why we need insurance at all. How does it differ from home and auto insurance? Is my boat covered when it is out of the water?
Why Do I Need Boat Insurance?
Let’s start with the biggest question, “why do I need boat insurance?”. Your boat is mobile just like your car. Just as you have car insurance to protect yourself, your passengers and other vessel’s passengers, it is safest for everyone involved to purchase a policy on your boat too. This decision will protect you financially and from other liabilities. These types of water craft are especially good candidates for boat insurance: Boats that travel at high speeds, powerboats and sailboats larger than 26 feet, jet boats and/or wave runners. In either case, there’s no way to predict how other people will captain their boats, or what effects weather will have on your craft, and there is no way to prevent mistakes from happening.
What Is Covered With Boat Insurance?
How does a boat policy differ from that of Home and Auto policies? Similarly to car insurance, a boat policy will take care of bodily injury that may take place on the vessel and property damage to docks and watercrafts. Additionally, if you happen to hit another object or run aground, a proper insurance policy will handle the damage with little to no money out of pocket. Just like home insurance, your policy will cover liability for injuries on the boat. In the event of total loss, your insurance can offer a choice of replacement value or a cash settlement. Unlike other insurance policies, boat insurance comes with “lay ups,” or in other words, suspended coverage for short to extended periods of time of non-use. Be sure to ask your policy holder about discounted rates during scheduled times of non-use, such as winter months when it’s too cold to take her out.
Planning For Storms
For those who live near a hurricane zone, there is a chance that the insurance company will expect an evacuation plan for the boat. If the boat stays within the hurricane zone, will it be stored in hurricane-proof storage or will it be towed/moved outside the zone to a less risky area? Make sure to speak to the insurer to review all of your options.
Boat Insurance In Conjunction With Home & Auto Insurance
For those of you who have to commute to get your boat into the desired water source, you may be wondering if your boat is covered when parked on your land or being trailer-ed to your destination. This is a tricky one. In this circumstance, it depends on either your home or auto insurance policies. If your car insurance covers accidents including trailer-ed cargo, then yes, damage to your vessel should be covered by your auto insurance. Specified home policies may have coverage for various damages that were caused while the craft was parked on your personal property, but unless otherwise specified, coverage may not extend to boat vandalism or stolen goods. For specification on your policies you may want to contact your holders. Some companies may offer umbrella policies that could consist of additional limits, to cover whatever you may deem necessary.
Agreed Value Vs. Actual Cash Value
There are two types of boat insurance: Agreed value and Actual Cash value. Determining the best type for your budget depends on what you would like to pay up front. If you select to receive the “Actual Cash Value”, you will be covered based on what the boat is worth currently (including depreciation). You will initially cost more money up front. Some partial losses may be depreciated, but there is no depreciation for a total loss of the boat. If you choose to select “Agreed Price” when setting up your policy, you and the insurance agency will agree on a set price to be paid in event of total loss. This means, no matter when you may total your vessel, your insurance is based on its value when the policy was written. This type of insurance also requires less money invested in the policy up front.
What Category of Boat Do You Have?
There are various different types of policies dependent on the category of watercraft you are looking to protect, from yacht all the way down to personal watercraft like a jet-ski. Each policy has its own specifications, features and price structures. Adding some of the safety features to your policy may save you money in the long run. Here are a few common categories:
- Boat Clubs
- Professional – These policies cover Charters, Fishing Guides, etc.
In most cases, vessels 26' and smaller are called "BOATS,” and vessels 27' and larger are considered "YACHTS". Some agencies offer additional ‘safety’ discounts to help protect investments, such as kill switches in case someone falls overboard. Taking a discount qualifying boating class will provide additional ways to save money and teach you some topics to help keep you safe out on the water. Be sure to ask your holder what classes in your area offer discounts. You can also get discounts for having a If you are an occasional boater, you can extend your lay up periods, extending these periods of known non-use will cut your premiums during those points of the year. However, if you decide to use your boat during your designated lay up time, you will not be covered by your insurance if anything were to happen.
Factors In Determining Cost
The policy can be determined by many factors. Here are a few to consider:
- Boater Safety Education
- Carrying Car or Homeowners Policies With The Same Insurer
- Diesel-powered boat
- Distance of Boating
- Good Boating & Driving Records
- Liability Limits
- No Previous Claims
- Offshore Fishing Towing
Please contact us at Ingman Marine to talk over the details. Learn more about the types of coverage, the details about filing a claim and which insurance type would work best for you!
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