Boat Insurance

Small watercraft shorter than 26', such as canoes, small sailboats, and small motorboats with speeds below 25 mph, are generally covered for property damage under your homeowner's or renter's insurance policy, and therefore don’t require specialized boat insurance. Maximum coverage is usually limited, often to 10% of the home’s value but sometimes as low as $1,000. This is intended to cover the boat, motor, and trailer, so it's obvious that smaller policies won't go very far. It's also important to understand that this generally doesn't include liability insurance, although sometimes a rider can be added.

On the other hand, personal watercrafts, such as Jet Skis or Waverunners, and boats or yachts larger than 27' will generally require specialized boat insurance. Just like with car insurance, boat insurance is divided into liability coverage, which takes care of everybody and everything around you, and coverage for yourself and your own property. As this last category is where many boat owners aren’t sufficiently insured, we’ll look at it first.

In addition to the small boat-large boat issue, there are two types of boat insurance: actual cash value and agreed or stated amount value.

In the event of a total or partial loss of your boat leading to a claim, an actual cash value policy will pay the replacement value of the boat minus depreciation. That means you won't get enough to actually replace the boat you lost with a similar one, without digging into your own pocket.

An agreed amount value policy, on the other hand, means that your boat is covered for the full amount without regard to depreciation. Although the premiums may be more expensive, this type of boat insurance can be the most valuable in the long term, particularly if you have a partial loss, with damage to your boat that isn't enough to justify scrapping it. In those circumstances, agreed amount value insurance replaces your used equipment and fittings with new ones, again without regard to depreciation.

Both varieties of boat insurance cover the hull, engine, machinery, furnishings normally carried, fittings, and any other equipment that's permanently attached to the boat. Owners who carry other, specialized equipment such as expensive fishing tackle should ensure it's covered, as well. Note that the boat trailer is not included in that list.

Factors that influence the amount of your rates include the size and power of the boat, its inherent value, the type of sailing you do, and the water bodies you most often frequent. Discounts that insurance companies may offer include those for approved fire extinguishers, ship-to-shore radios, and more than one policy (auto, home, life, boat) with the same company. Taking a safety course, such as the one offered by the U.S. Coast Guard, and carrying a policy for several years without making a claim can also lower your rates. In addition, a diesel-powered motorboat is often less expensive to ensure than a gasoline-powered one, due to the lowered risk of explosions.

The boat owner's equivalent of comprehensive auto insurance is called an all risk policy, and it covers every sort of loss unless it's specifically excluded. This can be particularly valuable on storm-prone shores, as Hurricane Ike recently demonstrated by reducing hundreds of boats on the Texas coastline to splinters. Examples of exclusions in an all risk policy include normal wear and tear, depreciation, scratches and dents, and ice damage.

Liability insurance for boats is similar to that purchased for cars. It’s divided into bodily injury liability, which provides for emergency and medical care for people who may be hurt in an accident, and property damage, which covers damage to the other party's property. Additional boat insurance coverage may include guest passenger liability for those you welcome aboard, and personal injury protection for yourself, although if you have adequate health insurance that last may be redundant.

Theft and vandalism coverage may also be worthwhile, particularly if the boat is kept parked in the driveway rather than a secured storage center. Creative thieves have been known to observe the habits of owners and then boldly hook up the trailer to their own pickup truck and drive off in broad daylight. Disgruntled neighbors have also been known to bore hidden holes in unattended boats down by the keel, and teenaged graffiti is a universal threat.

There's an old and time-worn saying that's still worth repeating. "It's better to have insurance and not need it than to need it and not have it."

Boat Parts

Fish and Depth Finders
Navigation Lights
OEM and Addon Gauges
Boat Covers
Bimini Tops
Bilge Pumps