Boat Insurance

For many people, there’s nothing like owning a boat. The joy of being on the water is a lifestyle decision. The decision to own a boat also comes with the decision of whether or not to purchase boat insurance from a company like Unlike auto insurance, boat insurance is not a mandatory requirement for most boat owners. This means, if you’ve got a small fishing boat and don’t travel very far from the dock or shore, then the choice of whether or not to have boat insurance really comes down to liability. Do you want to have insurance in case someone get injured on your boat? It’s a tough call and considering that many boats like these cost $1,000 or less, you may find it better to be uninsured.

However, if you’re buying a more expensive boat, then boat insurance should be considered as important as auto insurance. Here are three things to consider when shopping for boat insurance.

Two Types of Policies

The two most common policies are an Agreed Value Policy and an Actual Cash Value (ACV) Policy. The purpose of these policies is to determine what you will be paid should your boat be declared a total loss. With an Agreed Value Policy, you and the insurer agree on a valuation for your boat. If you have to file a total loss claim, that is the amount you will be paid, period. With an ACV policy, the amount you would get paid will depend on the market value of your boat at the time of the accident. This takes into account depreciation, so you will get less than what you paid for your boat. The same is true for partial losses.

What Discounts Will You Receive

In many cases, a boater will start with a discount because they have not filed a claim against the policy. However, this discount may disappear once you make a claim. But if, for example, you have multiple items stolen from your boat, does this qualify as one claim or four? These are the types of things you should discuss carefully. Taking courses in boat safety can also help you lower the cost of your policy. And finally, you can lower the cost of your policy by increasing the amount of your deductible. The more you can realistically afford to pay out of pocket, the more you can save. And one more thing to consider. Do not overvalue the price of your boat according to Insure it for the price it would cost to replace and not a penny more.

Read the Fine Print

Here are just a few things, you’ll want to make sure you are clear about:

• If you’re using your boat for commercial work, make sure your policy covers that. Many boat insurance policies cover pleasure boating only.

• Understand what items are depreciated and what items are covered for loss. Can any of these items be covered by your homeowner’s insurance policy?

• Be sure your insurance is not limited to the state or even specific area you live in. If you take your boat with you on a winter vacation, make sure your coverage travels with you.

• Be sure your policy covers you for the entire time you will be using your boat. If you plan on using your boat year-round, make sure it’s covered for 12 months.