If you have a boat, you know nothing is like the warm sun and cool breeze on the water. You probably cherish the memories you make out on the water, which makes it all the more reason to protect your boat with the right insurance.
Purchasing boat insurance can give you and your passengers peace of mind while you’re enjoying a weekend afloat.
While boat insurance might not be required in your state, purchasing a policy should be a top consideration.
What Does Boat Insurance Cover?
Boat insurance contains coverage types to help in different situations, much like car insurance:
Property coverage. This protects the boat against theft and damage due to an accident or sinking. This coverage usually applies to the boat whether it’s on land or water.
You may get a choice of actual cash value or replacement cost coverage in the event your boat is totaled or stolen:
- With actual cash value coverage, if your boat is totaled your insurance claim will reflect the value of the boat at the time of the incident.
- Replacement cost coverage doesn’t factor in depreciation. It will reimburse you for the amount of money it would take to repair your boat back to the same condition before the accident or replace it with the same or similar boat model.
Liability coverage. If your boat damages someone else’s property, such as another boat, or injures someone during an accident, liability coverage pays their damages. It may also cover problems caused by your watercraft, such as a large wake. Liability insurance also covers your legal fees if you’re sued over a problem covered by the policy, such as a boating accident.
Medical payments coverage. If you or your passengers are injured in a boating accident, medical payments coverage pays for your medical bills.
Uninsured watercraft coverage. If an uninsured boater strikes your boat, uninsured watercraft coverage pays your medical bills.
Boat Insurance Add-Ons
As a boat owner, you may need to purchase additional insurance such as coverage for:
- Boat trailers
- Special equipment such as fishing gear
- Boating accessories such as radar
It’s also important to investigate coverage for fuel spills or wreckage removal in case an accident occurs on the water.
What Does Boat Insurance Not Cover?
All boat insurance policies will have exclusions. Some common examples are:
- Wear and tear from regular boat use
- Manufacturer defects
- Faulty boat design
- Bug destruction
- Mold damage
- Damage from creatures or aquatic life
Consequences of Operating a Boat Under the Influence
Alcohol use was the leading cause of fatal boat accidents in 2019, according to data from the U.S. Department of Homeland Security and the U.S. Coast Guard.
Like drinking and driving, operating a boat under the influence of alcohol or drugs is illegal in every state. Also, federal law prohibits boating under the influence (BUI), which the U.S. Coast Guard enforces. This law prohibits all boaters from operating vessels while under the influence, even foreign boats in U.S. waters.
Penalties for drunk boating vary by state and jurisdiction of the waters but can include:
- Large fines
- Suspension or revocation of boat operator privileges
- Suspension or revocation of driver’s license
- Jail time
In addition to facing state and federal penalties, you may get severe consequences from your insurance company. For starters, if you get into an accident as a result of operating a boat under the influence, your insurance company might only pay out a liability claim against you. It might not cover damage to your own boat. Your insurer could also decide to cancel your boat insurance coverage after a drunk boating accident.
If you’re convicted of BUI with no accident, your insurer could still drastically raise your boat insurance rates or, worse, cancel coverage. While you might be able to find other boat insurance coverage after a cancellation, you’ll likely have to pay significantly more for a new boat insurance policy.
Boat Insurance Cost
The average cost of a boat insurance policy is generally $200 to $500 a year, according to Trusted Choice, an association for insurance agents.
Factors that determine a boat insurance rate include:
- Value of the boat
- Boat length, age and category
- Engine type
- Place of anchorage
- Location of boat use
- The boating experience level of the boat owner
- Owner’s past claims
In some cases, an insurer could also factor in your driving record and whether you have taken any safe-boating courses.
Discounts for Boat Insurance
To lower boat insurance costs, look for discounts such as:
- Bundling multiple policies such as boat and auto insurance
- Having Coast Guard-approved fire extinguishers
- Being without a claim for a couple of years
- Completing boating and water safety courses
- Having a diesel-powered boat
Do I Need Boat Insurance?
Some states require boat insurance. Also, if you dock your boat or finance it, the marina or lender will probably require coverage.
But even if your state doesn’t require it, consider the implications of going without boat insurance. If you get into an accident, you’ll be on the hook for your own repairs and your liability to others. With the average boat insurance claim hovering around $11,000, according to The Hanover Insurance Group, not having coverage could put you in a sticky financial situation.
The type of insurance you need will depend on the vessel’s size, type and value:
Small boats. Standard homeowners or renters insurance policies often cover smaller boats like canoes or small sailboats, but usually have limited property damage coverage. While a homeowners insurance policy typically provides coverage for the small boat, motor and trailer, it excludes liability insurance. But it’s possible to add boat liability coverage to your home insurance policy for an additional charge.
Larger boats. If you have a larger and faster vessel like a yacht, you will need to purchase a boat insurance policy. Depending on the boat accessories you have, you may need additional insurance such as trailer coverage.
Also, to increase your liability coverage limits, consider umbrella insurance. It provides extra liability protection for your auto, home and boat, such as extra insurance in case you’re sued for a costly boating accident.
Article By: Ashley Kilroy, Jason Metz
Source: Forbes Advisor