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Most boaters realise marine insurance policies differ from what is available for a car.
Variations exist in the basic coverage provided by both types of policies and not knowing these distinctions could hurt your bottom line after a loss.
Marine insurance is composed of two broad categories, liability and physical damage coverage:
Liability Coverage - This insurance coverage pays the costs that might be due third parties for injury, loss of life or property damage. These would be people besides you or your immediate family injured in an accident. It will also cover legal expenses that might arise from defending an accident related lawsuit.
Physical Damage Coverage - This portion of your policy pays for the cost of damage to boat itself and its related machinery. Polices may limit payments due to weather or vandalism. Try to purchase an "all risk" policy that does not list specific exclusions to its coverage. Ensure your policy covers all the equipment found on the boat and insures it while being transported or stored at home.
Physical damage coverage can be settled on an agreed or actual cash value. The difference could have a major effect on your ability to replace a boat or major component.
Agreed Value - The policy will cover the cost listed in the insurance agreement for the boat after a total loss.
Actual Cash Value (ACV) - The policy pays only what the vessel is actually worth based on age and condition. This coverage will be less expensive, but provides less coverage for replacement or repair of a damaged boat.
These are several other insurance options available for boaters:
Medical Payments - Persons on-board are covered for their reasonable medical costs associated with the accidents or incidents on the insured vessel. Coverage can include things like ambulance fees and hospital charges. Some policies will cover costs associated with swimmers and skiers that use your boat.
Towing and Assistance - Coverage of emergency assist towing, emergency repairs, and providing fuel while out on the water.
Personal Property - Covers the loss of personal items that were on-board a boat involved in an accident. These could include things like cameras, cellular phones, fishing equipment, and clothing.
Uninsured Boater - This insurance covers the loss of your boat caused by a boater operating without liability insurance. The cost of this insurance is low compared to the risk, there are many boaters out there that don't carry insurance.
Oil Pollution - The cost of responding to and cleaning up after a fuel or oil spill can be staggering. Many boaters don't anticipate this issue until their vessel sinks and it causes a spill. Commercial vessels routinely carry this insurance and many recreational boaters have added it as well.
There are many things you can do to reduce the cost of insurance premiums.
Vessel Safety Checks - Obtaining one of these free inspections from the Coastal Guard Auxiliary is painless way to lower insurance premiums with many insurance carriers.
Training - Boat owners who complete boating safety programs can qualify for reduced premiums. Members
Layup and Storage - Risk and liability are a function of use. If you pull your boat every season, check with your agent and verify this is calculated in your premium.
Equipment - Some insurance carriers offer premium reductions for installation of safety devices like GPS navigation equipment, fire extinguishers, vapor detectors, EPIRBs, high water alarms and the like. Check with your agent for additional ideas.
Mooring - The condition and operation of the marina you moor in can help with the cost of insurance. Choosing the right marina also has environmental consequences.
Diesel Power - Diesel engines offer a number a safety benefits for boaters compared to gasoline powered boats. Use of a marine diesel engine could lower premiums.
Deductibles - Boat owners that can afford a higher deductible will see a difference in their premium. Marine policies can express deductibles as percentage of the policy value or a flat amount.
Final Thoughts - Vessels over 26 feet in length are considered yachts by many insurance carriers. It may be worth checking on the differences in coverage and cost by adopting one of these policies. Consult with a professional marine insurance broker if you have a larger vessel or unusual risks to consider. Boat insurance can vary much more from carrier to carrier than what we are accustomed to in the automotive realm. It pays to conduct research and compare policies and company qualifications.
Many homeowner's policies cover boats while they parked at your house. Extra coverage may be available, but could likely not replace the coverage found in a marine policy. You can also take steps to make your boat a less attractive target.
