When summer is around the corner, it’s time to start thinking about how you’re going to enjoy your warm, sunny days. Maybe you already own a boat or you’ve saved up to buy one. You’re likely eager to feel the sun’s rays on your skin and the refreshing spray of water against your face.
If you want to join the millions of recreational boat owners in America, you’ll want to consider purchasing boat insurance to protect your asset in the event of damage or theft. Boat and yacht insurance policies can vary from company to company, which can leave boat owners unsure about which are the best boat insurance policies for them.
At David Pope Insurance Services, LLC, we have developed this guide to boat insurance requirements to help you navigate the process of securing the policy that’s right for you.
Many boat owners assume their boat will be covered by their homeowners insurance policy. Though some insurers do lump boat insurance with home insurance, these policies typically don’t cover all your needs. For instance, many home insurance policies don’t cover boats that are high-value, over a certain length or used beyond the beach inlet.
Insurers also tend to cap your coverage at a low percentage of your house’s insured value, and many don’t include liability coverage, which is essential to cover your costs if your boat causes damage to others. This means a homeowners insurance policy may only be helpful if your boat is inexpensive, slow and small.
This is why we recommend purchasing separate boat insurance. Watercraft insurance can be compared to car insurance in that your boat and your vehicles have different needs than a home. Your boat is a unique asset that has different needs from your home assets. Fortunately, boat insurance can protect your asset in the event of marine-related incidents.
If you own a large sailboat, yacht, personal watercraft, jet boat or any watercraft that moves quickly, you can benefit from purchasing boat insurance. Below are some of the types of boat insurance, including hull insurance, agreed value and actual cash value:
In the event that you experience a loss to the hull, equipment or machinery of your boat, the amount you will pay is known as your hull deductible. Some insurers will use a flat deductible amount, while others use a percentage of your boat’s value to calculate your hull insurance. If you own any type of watercraft, you may want to have hull insurance coverage.
Agreed value is essentially your boat’s sticker price when you insure it. Your insurer will pay according to your boat’s value at the time your boat insurance policy is written. This price is agreed upon upfront and doesn’t change or include depreciation. For example, if you bought your boat, insured it three years ago and make a claim on it this year, you will receive a payout based on the amount your boat was worth three years ago, not its depreciated value today.
Though this can sound great since the depreciation of your boat isn’t included, this can cost you more upfront and your deductible may be higher.
Actual cash value is a plan that takes depreciation of your boat into account. When you make a claim, your insurer will pay out an amount based on your boat’s current value. Your policy will allow you to receive the actual cash value of your boat at the time you make your claim, whether for a partial loss, such as collision damage, or full loss like theft.
If we use the same example above, your claim will be paid out according to your boat’s current value, not according to its value when you bought and insured it. Though the payout based on actual cash value is typically less than the payout based on agreed value, the deductibles and upfront costs tend to be lower as well.
To decide whether actual cash value or agreed value is right for you, consider your boat’s condition and usage. Those who own large, new boats often choose agreed value, while those who own a boat with some depreciation tend to choose actual cash value.
Insuring a boat comes with unique coverage because different areas of insurance are involved, including personal liability, theft and collisions.
You’ll want to understand what types of boat insurance coverage are available to you and how each type of coverage can help you if you have to make a claim. Insurance coverage for boats may include:
Not every boat owner needs all these coverage types, so speak with your insurance agent about which coverages may be right for you.
What boat insurance policies cover and don’t cover can vary from insurer to insurer. Typically, boat insurance doesn’t cover normal wear and tear that you can protect against with certain measures. Instead, it is your responsibility as the boat owner to maintain your watercraft.
Boat insurance covers many types of watercraft. Below are some of the types that can be insured.
We all want to get the coverage we need at the most affordable price. So how much can you expect to pay for marine insurance? Let’s break down how the cost of insurance is determined and the boat insurance discounts you may want to discuss with your insurance agent.
The cost of your boat insurance varies depending on a few factors, including:
To reduce your insurance cost, you may want to increase your deductible. You can speak with an insurance agent about your boat insurance needs and get a more accurate idea of your possible insurance cost by requesting a quote from your insurance company.
Insurance companies may offer various ways for their customers to save money, like discounts. Ask your insurer about discounts for:
While you hopefully won’t need to make a claim, you may want to be prepared in the event that you do. You aren’t required to keep proof of insurance on your watercraft, but it can be a good idea to have this information handy if you experience an emergency. After the incident occurs, you’ll submit your claim and provide some basic information to your insurer.
When you are shopping for your boat insurance policy, ask about the claims process. You may also want to ask whether an agent will be available to help you in the aftermath of a claim, as you may want assistance with arranging salvage or towing.
Are you looking for a local, family-owned provider for your boat insurance? Look no further than David Pope Insurance Services, LLC. We are based in Union, Missouri, and we help clients throughout the state and beyond find the right insurance policies that meet their needs.
Tell us about your unique insurance situation, and we will work with you to determine the best way you can get the coverage you need at a premium you can afford. We can find great boat insurance policies for you, and we can also help you obtain other insurance. If you are a first-time homebuyer or looking to buy a second, high-value home, we can help. If you want a life insurance policy that will protect your family, you can trust us to help you find the right coverage for you, no matter your age or the size of your family.
Whether you are looking to insure your yacht or your sailboat, you can count on us. Request a free custom quote from us at David Pope Insurance today.