When a person owns a boat he or she needs to have insurance for the vessel to cover both any liability issues that may arise as well as protecting the boat from theft, vandalism or other damage. While the process of buying boat insurance is similar in many ways to buying auto insurance, there are some important points about boat insurance that owners should understand before deciding on what policy to purchase.
A boat owner needs to determine what coverage he or she has for the boat before buying insurance in order to avoid paying for duplicate coverage. Existing insurance that may offer some protection for the boat include homeowners or renters insurance and facility insurance at any location where the boat may be stored. Homeowners and renters policy cover the value of an insured person’s possessions. However, coverage for larger items, such as boats, may or may not be present. Many docks and marinas used to provide coverage for boats that were docked or stored at their facility. While this coverage is not as common as it used to be, it is still in place at some facilities.
Agreed or Actual Value Insurance
When looking at different boat insurance policies, boat owners need to know if the policy in question is an agreed value policy or an actual value policy. An agreed value policy covers the boat for the value of the boat when the policy is written. With an actual value policy, the insurance covers the actual value of the boat at the time of the covered loss. As used boats quickly depreciate in value, an actual value policy will pay out less and less for a covered loss as time goes passes. Agreed value insurance is generally more expensive as it will typically payout a larger amount in the event of a covered loss.
Out of Water Coverage
When a boat is being pulled on a trailer, the boat is covered by the vehicle’s auto insurance. When a boat is parked at a person’s house, it is covered by the homeowners insurance. Though the boat is covered during these times, the amount of coverage available is often lacking. A boat owner should either buying an additional policy to cover the boat when it is out of the water or add to his or her auto and home policy to adequately cover the boat.
Additional Insurance Options
Boat owners have a number of options available to consider when buying insurance. Hull protection insurance is available for boats that covers damages to the hull due to rot, mold, corrosion, etc. Boat owners who will have expensive possessions on the boat, such as fishing equipment, may need additional property insurance to cover the equipment. Liability coverage can be purchased to cover environmental damages from oil or fuel leaks into the water. Towing, salvage and wreckage insurance can also be useful protections in the event that a boat is sunk or severely damaged.