Boat owners should understand how marine insurance differs from that of your car. There is little difference between the two types of policy except the amount of cover provided with boat insurance is considerably larger. Though one goes by land and the other by sea, there are variations beyond the basic coverage common to both. In fact boat and yacht policies can even vary between companies that specialize in marine insurance.
The standard policy, the watercraft liability insurance coverage, is required by law in most states. This insurance policy provides coverage in the event that damage occurs to a person or property as a result of actions taken on your boat. This is true whether or not it is during transportation or actually on the water. This is a law requirement in having this type of liability coverage, and each area will have its own requirements as to how much you will need. It is wise to consult with an insurance agent to find out what is necessary to meet the requirement of the law.
Liability and physical damage coverage form the core of any marine policy.
Liability Coverage: This covers legal obligations to third parties due to injury, loss of life or property damage.
Physical Damage Coverage: This type of coverage reimburses for any damage to the boat and its machinery. The best physical damage policy is an all risk which covers any cause of loss not specifically excluded in the policy, like wind storms, vandalism and collisions with the dock. It is recommend that you select a policy that continues to cover your vessel even when it is stored or being transported by trailer.
When comparing physical damage coverage you should be able to differentiate an insurance settlement which is based on either an agreed value or actual cash value.
o Agreed Value: Reimburses the insured for the amount listed on the policy in the event the vessel is a total loss.
o Actual Cash Value: Takes into account depreciation and the condition of the boat at the time of loss. The latter option provides less coverage but the premium is usually reduced.
Other additional marine coverage includes:
o Medical Cover: Pays your first aid, ambulance and hospital bills in case of accident. Also covers any passengers injured on your boat.
o Towing and Assistance: Pays for emergency assistance such as boat towing, emergency repairs while underway or fuel delivery at sea.
o Personal Property: Reimburses for loss of personal effects, clothing, fishing gear and more.
o Uninsured Boater: While not mandatory, this coverage compensates you and your passengers for injuries caused by another boat owner who carries no liability insurance.
How much your insurance will cost depends on several factors, including the value of the boat, its length, age, the type (sail or power), mooring location, intended area of navigation and how high a deductible you choose. You can reduce your premium by accepting a higher deductible, reducing your area of navigation, installing safety devices like a fire extinguishing system in the engine compartment or a vapor detector in the bilge.
Finally, when shopping for boat and yacht coverage, compare quotes and speak to the experts in marine insurance. Insurance agents outside the field often lack expertise in providing adequate protection for seagoing captains.
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