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Do You Have Enough Boat Insurance?

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 | May 21, 2020

Owning a boat is one of the greatest joys in your life. Are you doing everything you can to protect your boat, and the pleasurable hours spent on the water that come with it? Do you have enough boat insurance to protect your finances and assets—and your summer fun— in the case of loss or damage? Let’s take a look!

 

What is boat insurance?

Boat insurance helps cover loss or damage to your boat, like auto insurance does for your car. It will typically cover motorboats, fishing boats, paddle boats, sailboats, yachts, and leisure crafts. It usually doesn’t cover canoes, kayaks, and personal watercrafts.

A standard boat insurance policy typically covers collision damage, comprehensive damage, property damage liability and bodily injury liability. There are other forms of insurance you can purchase as well, like personal property, towing and assistance, and uninsured/underinsured boaters. We’ll delve deeper into what each of these policies cover and how much coverage you might need for each below.

Check out The Ultimate Guide For Insuring Your Boat for more information.

How much boat insurance do I need?

How much boat insurance you need ultimately depends on your risk factors and the value of your boat. There’s no one-size-fits-all when it comes to boat insurance. We’ll go through each portion of your boat insurance policy to discuss how much you might need for your boat to be fully covered.

Requirements

First, you want to find out if your lender or marina requires boat insurance. If you have a loan out on your boat, the lender might require a certain amount of insurance to protect their asset. Check your contract to see if you have any boat insurance minimum requirements. Additionally, some marinas, especially state-run marinas, also require insurance so they know the boats are safe and insured at their dock.

Moreover, a lot of states require liability insurance (bodily injury and property damage) for some types of boats. For example, if you have a powerboat with over 50 horsepower, your state may require liability coverage.

Give one of our insurance advisors a call at (844) 824-2888 to discuss what you need, based on your state, boating location, and boat type.

Collision and comprehensive damage

Collision and comprehensive help cover damages to your own boat in the case of damage, loss, or theft. Collision can cover the cost to repair or replace your boat if it collides with something else, like another boat or a dock, regardless of who is found at-fault. Comprehensive helps offer compensation for other causes of damage to your boat, like vandalism, theft, or natural disasters.

The amount of collision and comprehensive coverage on your plan should equal the value of your boat. In the case that your boat were stolen or completely destroyed, you would want your insurance to pay you enough to replace your boat. This means you typically want to receive the market value of your boat. This is the value your boat would be worth (how much buyers would be willing to pay) the day before the incident. This isn’t usually the price you paid for the boat, as it includes depreciation.

To get this valuation, it’s best to have a marine surveyor define how much the boat is worth when you’re purchasing or updating your insurance. They’ll look at your boat condition, level of maintenance, and geography to come up with a “replacement value.” How much your boat is worth depends on its type, size, age, motor, power, location, and other factors. We don’t recommend trying to guess its value, and a lot of insurance companies won’t even accept a valuation without an official marine surveyor.

Replacement value or agreed upon value means you are paid out the amount that your boat is valued for. Actual cash value is how much your boat is worth today, including depreciation. Actual cash value may not be enough to replace your boat, but the premiums will be less expensive than replacement cash.

Exclusions

Your insurance won’t cover all events. Some boat policies exclude hurricanes or storms, for example. This means you may want to consider purchasing an additional rider to help protect from these instances, especially with a boat out on the water. Check to see what exclusions are on your policy so you can fill in gaps of coverage accordingly.

Read: 8 Insurance Considerations When Buying A Boat

Liability

Liability helps cover the costs if you are found responsible for damages to another party. Your boat “liability” includes bodily injury and property damage.

Bodily injury helps cover physical injuries you caused to another with your boat. It can help pay the expenses of resulting medical bills, loss of income, pain and suffering, and your legal expenses.

Property damage liability helps cover the damage your boat causes to another person’s property, including boat, dock, and other property and structures. Your insurance may also cover their damages as well as any associated legal expenses.

How much liability insurance do you need for your boat? You want enough liability insurance to cover all of your assets, not just your boat. If you are at-fault for another person’s damages, they could sue you for hundreds of thousands of dollars. In severe liability cases, that means all of your assets could be at risk—your house, car, belongings, future income, retirement savings, college funds, and more.

That’s why most professionals recommend at least $1 million in liability insurance for powerboats. The very minimum should be $100,000 if you have a small sailboat that doesn’t hold a lot of risk. Still, you can get a lot of liability insurance at a low premium, so it’s worth considering enough to cover all of your assets. If your boat insurance doesn’t offer these limits of coverage, consider an umbrella policy for additional liability protection.

Optional coverage

Standard boat insurance might not be enough. You may want to consider purchasing additional coverage to help ensure you’re fully protected—no matter what may happen out on the water.

The most important supplemental coverage (which may be included in some carrier’s standard policies) is uninsured/underinsured boat coverage. This helps pay for your costs if another boater causes damage to you, your passengers, or your boat, and they don’t have enough insurance to cover the costs. We recommend at least $10,000 for this insurance.

Another important policy is personal property (also called personal effects). This helps cover the belongings you keep on your boat. So, if someone steals your boat, your standard policy will pay for the boat itself, but not anything that was on the boat (like your fishing equipment). If you have personal property that you keep on your boat, you’ll want to ensure it’s itemized on personal property coverage. You may not need to include it on your boat insurance if it’s already included on your homeowners’, like a portable speaker, but we recommend purchasing personal property insurance for all items you consistently keep on your boat.

Other types of optional coverage to look into:

  • Medical payments
  • Emergency services
  • Personal property
  • Boat equipment
  • Fishing equipment
  • Repair cost endorsement

Learn more about these different optional boat coverage options here.

Do you have enough boat insurance?

Make sure your boat and assets are fully covered against all possible incidents. It’s our job to see the unforeseeable and predict the unpredictable events in your life, so no storm can sink your ship. (Well, it might. But your insurance is there to help cover the costs.)

Chat with an InsuraMatch advisor today to make sure you have enough boat insurance—at the right cost—for total coverage and peace of mind. We’ll help you find the right carrier, plan, and premium, so you can feel safe sailing to your heart’s content.


Compare boat insurance quotes with one of our expert insurance advisors by calling (844) 824-2888.

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