If you own a boat, you should purchase an insurance policy to protect it from damage and liabilities, as replacing or repairing a boat can be incredibly expensive. Here are some important details you should consider when purchasing boat insurance.
Why do you need boat insurance?
The bank or marina where you dock your boat will sometimes require you to maintain a certain level of insurance coverage in order to use their services. Likewise, any boat that was purchased using a loan will most likely require a minimal level of coverage. In fact, if you have a boat that you still owe money on but don’t have insurance, some lenders may force a marine insurance policy onto your boat.
Apart from legal or contractual requirements, your need for boat insurance is mostly determined by how much risk you are willing to take. Boating is a potentially hazardous activity and having a strong insurance policy can help mitigate much of the risks associated with operating your boat. If you choose to purchase a boat insurance policy, the peace of mind knowing that your property is covered may improve your boating experience.
What types of boat insurance are available?
Like any other insurance category, there are several policy types available for boat owners. They include the following:
- Agreed value policies: When you file a claim, an agreed value policy will cover your boat based on the value it held when the policy was entered into. Therefore, your policy will not account for depreciation when you attempt to claim a total loss for the boat. Though, some partial losses may be depreciated.
- Actual cash value policies: Actual cash value policies do account for depreciation, unlike agreed value policies. The tradeoff is that these policies are typically less expensive up front. When you file a partial or total loss claim under one of these policies, your insurer will only pay an amount equal or less than the current cash valuation of your boat.
What can boat insurance cover?
Physical damage coverage is common because it protects your boat from damage and loss related to common events like fire, storms, theft, or collision. Your policy can be structured to cover all permanent components of your boat, such as motors, fuel tanks, anchors, etc. Additions, like boat trailers, may not be covered.
Most states and organizations that require you to hold boat insurance will require a policy that includes liability coverage as their minimum standard. Boat liability insurance primarily provides two types of coverage, they are:
- Watercraft bodily injury liability coverage – If someone is injured in an accident caused by your boat, this type of coverage will help pay for medical bills and related costs.
- Watercraft property damage liability coverage – If your boat is involved in an accident with another boat, such as a collision, this coverage will help cover the costs of repairing or replacing another boat or other property.
If your boat is damaged over time by something other than an accident, a policy that covers consequential damage will help you pay for repairs or replacement. Examples of consequential damage include rot, mold and corrosion or other forms of wear and tear. Consequential damage is often offered as an add-on to certain policies.
If your boat is inoperable or stuck, you may need help getting it back to shore. Towing services are often very expensive, with costs ranging in the hundreds of dollars per hour. Adding towing coverage to your policy can help you mitigate this cost if you are ever stranded on the water.
What kind of insurance do I need for my boat?
The cost of your boat insurance you need will vary based on your specific circumstances. Consider the age, length, value, speed, and condition of your boat before making a decision. Also think about how often you will use your boat, where the boat will be operated, and how skilled the most frequent drivers are. All of these factors should be weighed liberally in order to find a policy that provides you with adequate coverage while remaining affordable.
Find boat insurance
Get help finding the right boat insurance policy. Reach out to Acropolis Insurance for more information and a free quote.
