Boat Insurance Basics: What You Need to Know
If you own or are thinking about purchasing a boat, there’s one thing you need to understand above all else: boat insurance is a necessity. No matter what kind of boat you own, there is always a chance that it could be damaged or lost at some point, so it’s important to ensure that your investment and your lifestyle are protected.
We’re not going to sugarcoat it—boat insurance is expensive. But that doesn’t mean you should skimp out and try to save a few bucks on coverage. With insurance, as with many things in life, you typically get what you pay for, and because watercraft damage can be unpredictable and pervasive, it pays off to spend a little more on your policy and know that you have comprehensive coverage for all possible dangers. That way, if your boat does come into harm’s way, it’ll get taken care of quickly and effectively, with less hassle and frustration from all parties involved.
Fortunately, you don’t have to end up in deep water. Here’s everything you need to know about boat insurance basics before heading out this summer.
What is Boat Insurance and What Does It Cover?
Just like having automotive insurance covers many aspects of owning and operating a car, boat insurance is similar for all types of watercraft. While many states don’t require insurance policies to be held for personal watercraft (although many marinas do), boat owners should always ensure that they have coverage for whatever may come their way. Fortunately, most insurance policies are comprehensive, and cover some or all of the following:
- Sinking
- Fire
- Theft
- Storm Damage
- Collision
- Liability (damage to other boats or structures)
How Do I Choose a Policy?
The key to choosing a policy is to first look at your budget and determine how much coverage you can afford. In some cases, insuring your boat may be a part of a larger insurance package that also includes auto, homeowner’s or renter’s and life insurance policies.
In general, a boat insurance policy should cover three things: property damage, medical payments and collision/collision liability. To fully understand the risk and options available to you, you may want to sit down with an insurance agent to discuss your own circumstances, needs and considerations. Then, they will be able to review your needs carefully before coming up with an actionable plan that fits your lifestyle.
10 Things to Consider (along with Your Insurance Agent)
There are a number of things to consider when purchasing boat insurance (or simply before purchasing the boat itself!) When you sit down with your insurance agent, make sure to talk through the following items so you can make sure you are fully covered.
1. Am I already insured?
Because some policies will cover watercraft as part of a larger policy, check with your current insurance provider if there is any chance that you are already covered under your general home/auto policy, or if it would be better to consider stand-alone coverage.
2. Do I have enough liability protection in case someone gets hurt while using my boat?
Most states require boaters to carry at least $100,000 in liability protection—but some require more than double that amount! In addition, if you are renting a slip at a marina or have a membership there, there may be additional (read: higher) requirements for liability insurance. Make sure you not only understand the thresholds you need to maintain, but have insurance that covers you for the full amount.
3. How much will it cost to replace my boat if something happens?
It’s always better to over-insure than under-insure, but knowing how much your vessel is worth makes a big difference in calculating how much you should spend on protecting it. Fortunately, it’s not hard to determine the value, and an insurance agent can help you along the way.
4. How long am I covered for?
Just like car insurance, boat insurance policies typically last anywhere from six months to one year. To guarantee you always stay covered, make sure your policy will auto-renew so you don’t have a lapse in coverage.
5. What deductibles are involved?
Deductibles are just like those found on auto policies; higher deductibles mean lower premiums. Compare policy options alongside your agent to ensure that you’re balancing these two costs against each other, and won’t end up in a bind if something happens.
As you hit the water this summer—whether it’s at the local lakes or the open sea, make sure you’re covered along the way. We at Penny Insurance are always here to help you navigate the sometimes complex world of insurance coverage. If you would like to schedule a consultation or get a quote, please contact us and let us know.