Hurricanes offer a grim reminder of how weather can result in the loss of life in addition to damage to homes, autos and boats. They also offer up a good reminder to review your boat insurance policy. Reviewing your boat insurance and making necessary adjustments can help ensure that you have adequate coverage for your watercraft.
Here’s our guide on boat insurance and pointers about the right coverage. (These are issues to consider. Be sure to consult with an insurance professional):
Homeowner vs. marine policy
The first decision is whether to insure your boat as a rider to your homeowner’s insurance or in a separate marine policy. While homeowner riders might be adequate for small boats that use inland lakes and rivers, they don’t adequately cover larger boats or any craft that travel along coastal inlets or on the ocean. In these cases, a separate marine policy is required.
Type of marine policy depends on many factors
For marine insurance, Discover Boating published this list of issues an insurer will consider when assessing your boat insurance:
- Age of boat
- Condition (Does it meet U.S. Coast Guard standards in effect at the time it was built?)
- Primary residence (if the boat is used as a primary residence)
- Type (inboard, outboard, utility, cruiser, bass boat, saltwater fishing boat, performance boat)
- Homemade (Boats without a serial number are tricky but many kits are okay.)
- Houseboats with no motor
- Ownership (more than 2 owners)
- Where it will operate (an ocean, lakes, bays, rivers, Great Lakes)
- Deductible (Deductible options are set as a percent of the boat’s value, rather than a fixed amount.)
Here is one example of how these criteria affect insurance coverage and rates. In the case of “length,” for example, if a boat is 26 feet in length or shorter, it’s called a “boat;” if it is 27 feet or longer, it’s called a “yacht.” All other issues on the list above being equal, yacht insurance is more expensive than boat insurance.
Two of the major insurance decision factors: value and risk
Two big issues in marine insurance involve how the boat is valued and what risks are covered. First, on the issue of how the boat is valued, you can purchase either an “Actual Cash Value” policy or an “Agreed Value” policy. (Homeowner’s insurance offers a similar choice.) In the event of a total loss to your boat, an ACV policy will pay you the value of your boat less depreciation. An “Agreed Value” policy will pay you the full insured amount.
In the case of risk coverage, the insurer will give you a choice. You can purchase an “all risk” policy, which covers all risks STATED in the policy, or you have the option to specify the risks you want covered. Generally, boat insurance covers property damage liability, collision damage, bodily injury liability, hull coverage and fuel spill liability. Other coverages include personal effects, uninsured boater liability and towing. Most policies do not cover ice and freezing damage. Be careful to make sure the risks that most concern you are covered.
Hurricane coverage varies in cost
In terms of hurricanes, marine insurance hurricane coverage costs will be lower if your boat is in a hurricane zone and you have a way to protect your boat. Can you get it to a safe harbor or into a hurricane-proof shelter? If not, insurance coverage will be more costly.
Breach of warranty
“Breach of warranty” is important coverage to consider for your boat. “Breach of warranty” coverage in marine insurance covers you if you do something with your boat outside of what you warranted to the insurer as to how the boat will be used. “Breach of warranty” covers you if you go outside your boat’s navigational limits, use your boat during lay-up periods, use your boat for hire (when it is not registered as a commercial boat), and so on.
“Breach of warranty” coverage in marine insurance covers you in the event that you do something with your boat outside of what you warranted to the insurer.
Without breach of warranty coverage, you could be stuck with a damaged boat and have no way to pay off the damage or the boat loan.
How to get the best rates
As with all insurance, shop around and compare rates.
There are steps you can take to personally improve your risk and lower rates. For example, discounts are available if you’ve been certified in boating safety and if you have a good driving record, not just with boats, but with cars and other vehicles.
And, as with all insurance, rates are lower if your deductible is higher, if your liability limits are lower and (especially for boat insurance) if you waive towing insurance.
Again, consult with an insurance professional for your particular boat and use.