Boat Insurance Coverage

Boat Insurance Coverage Questions

If you have boat insurance coverage questions, it is important to speak with your insurer. Every policy is a bit different. If you are planning to purchase boat insurance, it helps to know what to expect before you invest. Insuring your boat is one of the most important steps you can take. It gives you the ability to have financial support should an accident occur. Take a closer look at some of the most common boat insurance coverage questions individuals ask.

Is a Boat Covered on Your Homeowners Policy?

Most homeowners policies do not include boat coverage. You should have a policy specifically for this vehicle. Watercraft insurance provides protection to this valuable asset. However, you may be able to bundle boat insurance with your home insurance. Doing so could reduce the cost.

What Is Replacement Cost?

Boat insurance is available as a replacement cost or actual value. The two are significantly different. You will need to choose between these options when working with insurance companies to obtain a policy. This coverage applies to situations in which the boat is totaled or completely unrepairable.

  • Replacement cost coverage provides compensation to replace your boat if it is totaled. It gives you enough coverage to buy a boat that is equal to the current boat you have.
  • Actual value coverage provides you with a payment based on the value of the boat right before the accident. Actual value tends to be less expensive, but your boat’s value will depreciate over time.
    For those who want the highest level of coverage, replacement value coverage tends to be best when it comes to total loss.

What Is a Total Loss?

In an accident, the insurance company needs to determine the best way to get repairs taken care of. In most situations, repairs are the most likely outcome. The insurance company gets a quote from those who are completing the repairs, agrees to the terms or negotiates them, and then writes a check. However, sometimes the damage is significant. In this case, the insurance company must decide whether to go ahead with the repair or replacement. If it deems the damage is too significant, the insurer will state the boat is a total loss. Your insurance will then payout based on the type of coverage you have.

What Is Property Damage Liability?

Property damage liability coverage for a boat is similar to vehicle liability coverage. The policy covers incidents in which you cause damage to another person’s property. For example, if you cause damage to a dock or you strike another boat while in the water, your property damage liability policy will most likely cover the incident. This component of your insurance covers the losses the other party sustained as a result of your actions or inactions. Since damage can be significant, you need liability coverage at a high enough value to minimize any out of pocket losses you may suffer.

What About Medical Bills from Injured People?

Policies differ on medical coverage. Most boat insurance policies provide coverage for the losses sustained by incidents in which you are liable. For example, if your boat strikes a person on a dock, it may cover that individual’s medical bills and other losses. However, medical payments may also apply for those on your boat. If someone falls and breaks their arm, the policy will cover this type of loss as well.

What About Physical Damage to My Boat?

Boat owners need to consider damage to their own boat in an accident when selecting boat insurance. A basic liability insurance policy does not help in this case. Rather, liability coverage applies solely to damage you cause to others. To protect your own boat’s value, you should consider purchasing comprehensive coverage. It should include collision insurance as well. Some insurers also offer uninsured and underinsured coverage, which can further protect your boat.
This type of insurance covers damage to your boat that is not related to normal wear and tear. It does not cover any type of damage brought on by poor maintenance. However, it should provide coverage for incidents such as storm damage or a fire.

Does the Type of Boat Matter When it Comes to Coverage and Cost?

A variety of things play a role in the overall type of coverage you need. The type of boat you purchase matters as well. Boats that have a higher value or a more powerful engine require a higher level of coverage on them. This is because these boats tend to be driven faster and are more likely to be involved in an accident than others. These policies tend to cost more because the value of your asset is more.
At the same time, boats with limited features, a small engine, and basic designs, are less likely to be in an accident. As a result, these insurance policies are less. If a replacement were to occur, the insurer would have less to pay out.
However, every policy should have coverage that fits its risks and needs. When working with your insurance agent, be sure to talk about:

  • When you plan to use the boat and where
  • The overall frequency of when you will use the boat
  • The way you will store it including whether it will be protected from the elements
  • The amount of liability insurance you need (often based on the type of uses you plan to have as well as the risks in your area)
  • The amount of comprehensive coverage you elect to purchase to protect your investment

Individuals should work closely with their insurance agent to select the appropriate boat insurance that meets their needs.

When Do You Need Boat Insurance?

If you own a boat, you should consider purchasing coverage. If you have a loan on your boat, it may be a requirement to maintain a boat insurance policy to protect the lender’s interest in your boat.

It is always best to secure the boat insurance you need prior to purchasing a boat. Your goal should always be to purchase enough boat insurance to meet your individual needs. Your insurance agent will help you choose coverage based on the value of the boat, the features it has, the way you will use the boat, and the overall risk factors that are present.

Olson Insurance Agency is a full-service insurance agency with an office located in Glendale, Arizona. We have ample experience in providing excellent customer service and support. Contact us today to see just how affordable boat insurance can be for your needs. We are happy to answer all of your boat insurance coverage questions!

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