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Guide to Boat Insurance: Coverage & Costs

It can be a lot to sift through when it comes to understanding what type of boat insurance you will need, and just how much boat insurance coverage is necessary. We've put this guide together for that very reason - to help you navigate all things boat insurance coverage so that you can make the most education choices when it comes to making your purchases.

It is often best to have separate boat insurance and homeowner's coverage when it comes to insuring your boat. Most homeowners policies don't cover marine-specific risk, or if they do, they limit their coverage, especially when it comes to wreck removal, pollution, or environmental damage. That said, there are some exceptions.

Some homeowners policies do provide coverage for small boats and motors. Usually, the horsepower limit is between 25- and 100, and although homeowners riders usually can cover these boats, it is important to ask the same questions as any other insurer regarding limitations in coverage when it comes to damages to your vessel or how they will be covered.

Most homeowners insurance riders are only applicable to waterways, lakes, and rivers. The coverage does not extend beyond a coastal inlet, or along the coast, so really wouldn't come in handy for Florida boat owners. Luckily, there are many factors that will help you suss out the perfect coverage for boat insurance. Here are some of them:

Boat Insurance Factors

When deciding whether to offer a policy to a potential new client, boat insurance companies consider many factors. You can insure almost any vessel, but it will cost you. To ensure that the boat insurance policy you buy meets all of your needs, consider the following:

  • Age of the Boat

  • Length

  • Value

  • Speed/Horsepower

  • Condition (Is it in compliance with the US Coast Guard Standards at time of construction?)

  • Primary residence (If the boat serves as a primary residence)

  • Type: Inboard, Outboard or Utility

  • Homemade (Boats that do not have a serial number can be tricky)

  • Houseboats without a motor

  • Ownership with more than two owners

  • Will it operate in the following areas: ocean, lakes, bays and rivers

Types of Boat Insurance

There are two types of boat insurance: you have the "agreed price" and the actual cash value. The primary difference is how depreciation is handled.

An "agreed price" boat insurance policy covers your boat based on the value at the time it was written. Although it may cost more upfront, the boat insurance policy does not depreciate for total losses of the boat. However, partial losses can be depreciated.

Boat insurance policies which are "actual cash value" policies have a lower initial cost, but include depreciation. The boat insurance policy will pay only the boat's actual cash value at the time of its partial or total loss. As your boat ages, your insurer will most likely insist on an actual value policy. This often results in substantial savings.

Different Types of Boat Insurance Policies

Boat insurance can be used to cover a variety of watercraft. It may surprise you to learn what is covered by boat insurance and what is not. These are some of the benefits offered by boat insurance policies:

  • Boat - typically, vessels smaller than 26' are called "boats", while larger vessels are called yachts. Because larger boats can travel further and are more exposed, yacht coverage tends be more extensive and specialized.

  • Personal Watercraft (PWC)

  • Sailboat

  • Dinghy

  • Boats & PWC For Hire - while this is not usually required, boat insurance will cover damage to the vessel as well as passengers and the operator.

  • Boat Clubs Covers all members while operating a boat.

  • Professional (ProAnglers, Fishing Guides & Charters). These boat insurance policies can be very flexible and can include items such as travel to a tournament or even equipment.

What do Boat Insurance Policies Cover?

The type of boat insurance coverage you require will depend on where and how you sail. A policy that covers all risks will provide the most protection. However, an all-risk boat insurance policy will not protect against every loss. Insurance terminology refers to "all risk," which means that the boat insurance policy covers any risk that is not explicitly excluded. Exclusions are usually wear and tear, denting, marring, animal damage and manufacturer defects.

Additional boat insurance coverage may be available. There are many options available, including medical payments, personal effects, and uninsured boaters liability. Towing and assistance may also be an option. Many boat insurance policies cover permanently attached equipment as well as items such as anchors, trolling motors and tools, as well as life jackets and seat cushions. These options should be discussed with your agent.

Types of Boat Insurance Coverage

Boat insurance will vary depending on what type of policy you have, but the most common add-ons to coverage (in addition or in replacement for basic ones) are:

  • Specialized Coverage - boat insurance to cover a specific item on your boat, such as an expensive prop or navigation device.

  • Salvage - is boat insurance coverage which pays to remove your boat from damage, whether it be substantial or minor.

  • Consequential Damage - This type of boat insurance covers a loss that is the result of wear and tear, not an accident (rot mold, corrosion).

  • Towing - On average, it can costs $400 an hour to tow your boat across water into safety.

  • Cruising Extension - If you are planning to leave the USA, (typically to Mexico and the Bahamas), you can get temporary, more comprehensive boat insurance coverage.

We hope that this quick tips guide helped to shed some insight on how important is it to acquire boat insurance for your watercraft, the types of boat insurance you might need or that would be available to you, and how to go about sussing out the amount of boat insurance coverage you should get.

Our agents are standing by to answer any further questions you might have or to get you set up with all things boat insurance so you're ready to hit the water this coming spring. Safe sailing, Florida.



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