Before heading out on the open waters in your boat, make sure you have the proper insurance coverage. Just like auto insurance, there are various coverages and limitations. Check out these tips for buying boat insurance from Nerd Wallet.
Do You Need Boat Insurance?
It depends on the type of boat you own. If you have a yacht, a large sailboat, a jet boat, a personal watercraft such as a WaveRunner or a boat that goes faster than 25 mph, the answer is yes, it should be insured.
Canoes, small engine boats and any small, slow or inexpensive craft typically do not need to be insured. However, it never hurts to have liability insurance in the event your boat causes damage to someone else’s property or if someone on your boat gets hurt.
Homeowners’ policies typically will cover a boat, but will cap coverage at $1,000 or 10% of your home’s value. So, this would only apply to small, slow or inexpensive vessels. Liability coverage under a homeowner’s policy usually doesn’t cover boats.
What Boat Insurance Covers
- Property Liability – This covers damages your boat causes to others property in amounts ranging from $15,000 to $300,000
- Bodily Injury – Pays for someone who is injured on your boat
- Damage or Destruction – Covers losses from a collision, fire, lightning, theft and vandalism and also damage to permanently attached equipment including anchors
- Guest Passenger Liability – Covers legal expenses of someone driving your boat with permission
- Medical Payments – Pays expenses for you and your passengers
You can purchase additional coverage for trailers, accessories, towing and damage caused by an uninsured boater.
Boat Insurance Does Not Cover
- Normal wear and tear
- Defective machinery or damage to machinery
- Damage from mold, sharks and insects
- Underage operators
Types of Coverage
There are two types of boat insurance coverage: actual cash value and agreed amount value.
Actual cash value pays the value of your boat at the time of the damage claim. If the boat is destroyed, the insurance company will determine the market value.
The agreed amount value coverage pays an amount agreed upon prior to the boat being destroyed. If the boat can be repaired, the insurer replaces old items for new ones without deducting for depreciation.
Just like auto insurance, you can choose a deductible for theft, property damage and medical payments that will lower your premium. Some insurers will credit you if the boat is taken out of the water for the winter. You can also receive a discount if you have auto and homeowners insurance with the same company and if you took a boating safety course.
You can purchase additional coverage for mechanical breakdowns and salvage and to cover unattached equipment such as fishing gear that might get lost while out on the water or stolen. If you have a yacht or other large boat, your insurer may limit where you can venture. You can expand the area of navigation at an additional cost.
Contact Lois Drukman at Walter May Insurance at 781-740-5421 for more information about boat insurance.