Boats are a significant investment. And more than investment, they are fun. They are the place where we made the best of our memories. Many of us also use them for livelihood. Whatever be the reason, taking on the waters can be risky. Someone might get injured, or your watercraft can get damaged, etc. And thus, to save the day, we have boat insurance. It is much like the automobile insurance and covers everything related to watercraft.
In this article, we will cover everything about boat insurance.
What Is Boat Insurance?
As the name suggests, it insures boats and gives you liability and damage cover. But here, you might think that I have homeowners’ and automobile insurance. Do I need boat insurance for my watercraft? Then the answer is yes, you do!
These policies have restrictions over size, horsepower, and damage cover. The coverage further varies by state and company. Thus, if you rely on your existing policies for your boat, you are most probably underinsured.
So, what kind of boat are included under the policy? Here they are:
- Personal Watercraft
- Boat & PWC Rental
- Boat Clubs
Now that we know the major categories let us discuss the various type of covers.
What Does Boat Insurance Cover?
#1: Property Coverage
Property coverage helps you protect yourself if your boat meets with an accident or gets stolen.
The best thing about this coverage is that it provides covers you on the water as well as land.
Thus, be it damage over land or water, we need to know the parts of your boat covered:
- Permanently Attached Equipment
Lastly, there are two types of payout in this coverage- Actual cash value coverage and Agreed upon coverage.
Actual Cash Value Coverage considers depreciation of the boat’s value when reimbursing you for repair or replacement. On the other hand, agreed-upon coverage gives you a pre-decided value agreed upon when you purchased the policy.
#2: Liability Coverage
Consider you are on the waters with your watercraft, and you run yours into another’s. The other boat is damaged, and the passengers are hurt as well. It is at this time that liability coverage kicks in. While it does not cover your loss, this coverage has got the other person’s losses covered.
One must have property coverage as well as liability coverage. This way, you ensure that your wallet is protected from your boat’s losses and the other ones. But still, your injuries are not accounted for under any of these insurances. And this brings us to the medical payments coverage.
#3: Medical Payments Coverage
As we have already hinted, medical payments coverage covers all your medical costs in the case of an accident. Costs like the X-Rays of your broken arm or the hospital bill of your injured head and so on.
#4: Uninsured Watercraft Coverage
This coverage is something many people underestimate. But it ensures you have all-around protection.
Uninsured watercraft coverage protects you if the watercraft that damages yours does not have any liability coverage. The watercraft causing the accident is not insured and cannot pay for the caused damages. In such a case, you can file a claim under uninsured watercraft coverage.
Also read: What is Umbrella Insurance and How it Works?
However, uninsured watercraft coverage completes your spectrum. But with differing personal situations, different additional coverages are required. Let’s have a look at them as well.
What Are Some Of The Additional Boat Insurance Coverages?
Here is a small list of other things or situations that boat insurance can cover.
#1: Specialized Coverage:
We often accessorize our boats with fancy equipment like a high-end radar or geo-location instrument. Such pieces of equipment are not covered to their total value with the original policy. Thus there is a need for a rider.
#2: Consequential Damage:
Accidents did not cause all the damage ever to boats. Rusting, rotting, and corrosion are threats, too, and consequential damage protects your watercraft from it.
As the name specifies, this rider covers the cost to salvage the watercraft, be it substantial damage or a minor one.
#4: Cruising Extension:
Say you need to move from the USA. Now, getting your boat to your new place is a significant expenditure. Cruising extensions help you get your boat to your new home without you having to break the bank or go broke.
What Is The Cost Of Boat Insurance And Factors That Influence It?
Like any other insurance, there is no set cost of boat insurance. Several factors affect the final premium cost that you would pay. And they are:
- The specifications of your watercraft. Its size, model, type, etc.
- The place where you will use your watercraft.
- The size of coverage also matters. Higher the coverage, the higher the premium.
- How often and for what purpose you will use your watercraft.
- Suppose you have a boating safety certificate. This factor might lower your premium price and also keep you and your boat safe.
- You can lower your insurance costs further if you have a good driving and boating record.
- A higher deductible means a lower premium and vice-a-versa.
- The towing insurance requirements also affect the premium price.
- Lastly, how you store your watercraft matters too.
In A Nutshell…
Having boat insurance is a must. And guess what? You can save even more if you buy from the same company as your car/home insurance. Additionally, if you boat in only a few months, like only in summers, your insurance company might reduce your premium. Details like whether your boat is in freshwater or saline make a difference too. Freshwater boat owners usually give away lesser premiums.