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Setting Sail with Boat Insurance

Jen Jones
Outside of cars and houses, a boat is typically one of the largest investments you can make. In order to protect your boat while it is docked or out at sea or, it is important to take out boat insurance for protection. Before selecting a boat insurance policy, you need to consider the amount of insurance coverage and how taking precautions on your boat can decrease your premium.

Boat insurance

Boat insurance covers boats up to 26 feet in length; a boat larger than this length requirement is classified as a yacht and would qualify for yacht insurance. Your boat insurance quote is based on several factors, including the boat’s current value and age, the type of boat, where you plan on navigating your boat to, and the location it will be moored. If you do not plan on navigating your boat outside of your local area, find out from your boat insurance company if you can have a limited navigation area on your policy instead of an unlimited region in order to save money.

Boat insurance Coverage

Boat insurance will provide coverage to your boat if it is accidentally destroyed or damaged. Covered disasters include collision, fire, theft, wind, lightning, hurricane, and vandalism. Boat insurance coverage includes everything on the boat, including coverage for the machinery onboard, motors, the boat trailer, and personal property. The best coverage you can get is one which will cover your boat while it is not in water, either when it is being stored or transported.

Each boat insurance company has different restrictions on the coverage of losses, so be sure to read the terms and find the policy best suited for your location and needs. For example, if you have a boat and live off the Southeast coast, you will want to make sure your policy will cover damage caused by a hurricane.

In addition to covering physical damage caused to your boat, marine insurance also covers liability to third parties. Marine insurance covers the first aid and hospital bills in case of an accident occurring to either you or a passenger on your boat. If your boat breaks down while out on the sea, your boat insurance will cover emergency services used to rescue you. Boat insurance typically includes coverage for emergency repairs, fuel delivery at sea, and boat towing.

Actual Cash Value vs. Agreed Amount Value

There are two main types of boat insurance policies: actual cash value and agreed amount value. Actual cash value will cover replacement costs less depreciation. If there is a total loss, the approximate market value of your boat is determined by using used boat pricing guides. By taking into account the depreciation and the condition of the boat at the time of the damage, the premium is reduced.

An agreed amount value policy means that you and your insurance company’s lender have agreed on a set value for your boat, and if a total loss occurs, you will be paid that amount. In addition to the value being replaced, old items will be replaced for newer models if there is a partial loss, without a deduction for depreciation. However, most of these policies do require actual cash value on specific damaged property, including sails, trailers, outdrives, dinghies, and protective covers.

Reducing Boat insurance Premiums

Similar to most types of insurance, you can save money on your boat insurance policy. If you complete a U.S. Coast Guard approved safety course in boating, many boat insurance companies will offer a discount on your boat insurance. If you take precautions in protecting your boat with devices such as depth finders, a radar system, burglar alarm, and a navigation system, it will help lower the boat insurance quote since you will not be deemed as a high-risk borrower.

Boat insurance can be costly, but it is a necessity if you are investing in a boat. With boat insurance providing coverage for physical damage and liability issues, finding a policy that has the best coverage for your needs is important, especially if you are keeping your boat in an area at risk for environmental disasters. Compare quotes and coverage plans with not only experts in boating, but with your insurance agent to guarantee yourself the best boat insurance policy.