Anchors aweigh—but not without coverage!

Between maintenance and dockage to the fuel and repair costs, a year of boat ownership can end up costing tens of thousands of dollars—and that’s after you’ve purchased the actual boat. With that in mind, many first time boat owners wonder if they need to make the additional expenditure of insurance. The answer is YES and here’s why:

first-class It is often required

There are several reasons you may be required to have an insurance policy on your boat. Some states require it, many marinas do too (if you are planning on docking it there), and if you’ve taken out a loan to purchase you boat, the bank may also make this a requirement. The best thing to do is to check with your marina, your county insurance commissioner and read the fine print of your loan papers.

You need to protect your investment

Just like your home and your automobile, your boat needs to be protected against damage, theft and loss. Without boat insurance, you could lose all that you invested when you purchased the boat in the event of fire, damage in a collision or other events including vandalism, lightning or sinking. With the proper coverage, you will be able to repair or replace your boat when the unexpected happens.

There are a variety of coverages to choose from when selecting your boat insurance including:

  • Property damage: Coverage in the event that you damage someone else’s boat or other structures
  • Bodily injury liability: Covers the cost of medical expenses, lawsuit settlements or legal expenses in the event someone is injured while on your boat
  • Collision Damage: Depending on the amount and type of coverage you choose, this covers the cost of repair or replacement if your boat is damaged in an accident
  • Comprehensive: Covers the cost of repair as a result of vandalism and/or compensation for items that are lost or stolen from your boat like fishing equipment, GPSs, etc.
  • Specialized options: Provides special coverage like roadside assistance, on-water towing and more

If you’ve never had a boat before, it’s a good idea to familiarize yourself with the way boat insurance works, how to determine which coverage you need and how much it is going to cost. So here’s a quick breakdown of what to expect:

How boat insurance works

Actual value vs. agreed value

Just like other insurance products, boat insurance offers you options when it comes to the amount of coverage you have. Choosing an actual value policy means that in the event that your boat is destroyed and cannot be repaired, you would be compensated for the current market value of the vessel. On the other hand, an agreed value or stated value policy will provide coverage for the specific amount you chose when you purchase the policy.

Cost of boat insurance policies

There are several factors that will determine how much you will have to pay for your boat insurance. Of course, just like your homeowners and automobile insurance, you can choose a higher deductible or less coverage to reduce your premiums, but beware of the latter because less coverage could leave you with nothing in the event of a disaster. Other factors that determine the cost of your policy include:

  • How big and how old the boat is
  • The size and horsepower of the engine
  • Where you live
  • Where you will be keeping it when it’s docked
  • Where you plan on boating

Amount of coverage

The amount of coverage you have on your boat insurance policy will be largely determined by you. If this is your first boat and it’s on the smaller side, then you may be able to get away with a little less than you would if it was a bigger boat. It goes without saying that more expensive boats usually dictate increased coverage. You will also want to consider getting uninsured motorist coverage in the event that you have a collision with a boater who is not as conscientious as you are.

As a new boat owner, there’s no doubt that you’re excited to get out on the water. Before you do, make sure you’re covered with the appropriate insurance policy so that you can enjoy every moment without the worry of unexpected events. For more information on boat insurance products, give us a call. We have various policies and would be happy to customize a quote for you.