Boat Insurance - Get the Facts

Spring is coming, and with it boating season.  With beautiful Lake Murray right in our back yard, fun on the water is a summer must-have for many here in SC.  It's important to make sure you have your boat, jet ski, or other watercraft insured correctly, so we thought we'd give you some tips on boat insurance.  For more details, visit www.boatinsurance.org.  Morgan & Associates always offers the best rates and best coverage for your watercraft – call us today for a quote!

What Boat Insurance Covers

What is and isn’t Covered by Boat Insurance

Don’t let a misunderstanding about your boat insurance policy ruin your boating season!  Some of the common coverages and options are listed below.

Three Main Boat Insurance Coverages

When you look at boat insurance coverage, it may remind you of your auto policy. And like your auto policy, coverage and limits vary between companies. But the main types of coverage for boat insurance are liability and (physical) property damage:

• Bodily Injury Liability- This coverage pays for expenses to an injury to others from an accident you caused. Medical bills, pain and suffering, defense costs and lost wages may all be covered.
• Property Damage Liability- This coverage can pay costs from damage to other property from an accident you caused. This could be damage to another boat, dock or other structure.
• Physical Damage- This covers damage to your own boat and its trailer. For example, if you hit a dock and your boat got damaged, the cost of repairing it would be covered. There are three ways this can be paid out:
  • Actual Cash Value- The market value of your boat and/or its parts
  • Agreed Value- You determine the amount of coverage when the policy is first written
  • Replacement Cost- Your boat will be replaced with the same type of new boat. However, it’s usually only available for boats less than two years old.

Replacement cost carries the most expensive premium expense. Also, deductibles are available for all of these coverages.

Six Optional Boat Insurance Coverages

Following are six optional boat insurance coverages:

• Underinsured/Uninsured boaters- Will cover you in the event you get in an accident with a boater who doesn’t have insurance or is underinsured
• Medical Payments- Medical or funeral expenses for you or your passengers will get paid for up to the policy limits, if you select this coverage 
• Fishing Equipment- This pays for damage to fishing equipment being transferred on or off the boat as well as when on the boat
• Personal Property- This pays for damage to personal property being transferred on or off the boat as well as when on the boat
• Roadside Assistance- This covers the boat during towing and possibly the towing vehicle
• Fuel Spill/Accident- Covers debris removal from an accident

Boat Coverage Exclusions

It’s very important that you check with your carrier on this because exclusions vary widely between companies. But here are some common exclusions:
Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals, zebra mussels, defective machinery or machinery damage.
Other watercraft such as a jet ski or dinghy may not be covered on a yacht policy. You’ll need a separate policy for those vessels.
Also, coverage may be unavailable for persons operating the boat if they’re under 16 years old.

Top 10 Boat Insurance Claims

Unfortunately, boat collisions are an all-too-common occurrence, regardless of how well you prepare behind the wheel.  In fact, boat collisions are far more prevalent than boat theft, according to the Saga Boat Institute.

Most Common Boat Insurance Claims

Boat insurance, like auto insurance, is a must-have for any boat owner, so it is interesting to learn more about the most common boat insurance claims; in particular the 10 most common boat insurance claims, as reported by the Saga Boat Institute, are:

1. Hitting a submerged object while cruising
2. Theft while anchored
3. Collision with other boats while boating
4. Storm damage while moored
5. Theft while in storage
6. Accidental damage while cruising
7. Flooding while moored
8. Sinking while moored
9. Owner negligence while cruising
10. Accidental damage while moored

Thefts while anchored are more likely to occur during the warmer summer boating months, so it is important to remember a few practical tips to prevent the theft of your boating equipment and supplies while the boat is anchored:

• Remove navigational equipment from sight.
• Don’t leave anything of value on the deck.
• Properly secure the motors, tenders and life rafts to the boat.
• Secure all boating equipment, such as oars and anchors to the boat.

Being prepared before you sail, understanding the weather and tides and using the equipment necessary to help you navigate the waters are the first steps in preventing a collision with a submerged object while cruising.

Boat Insurance Misunderstandings

by Michael Wassmer

Whether you have a sailboat, powerboat, wave runner, bass boat, cigarette or jet boat, owning a boat can be one of the thrills of your life. To use a boat with the peace of mind it takes to enjoy it, you’ll want to get boat (or watercraft) insurance.
But do you really know what the policy covers? Progressive Insurance performed a survey of 1000 boaters. The results of the survey indicated that many boaters have misunderstandings about boaters insurance. Here are some areas of confusion boaters have about insurance:

• Many boaters think their homeowner’s policy covers their boat. This usually happens with owners of wave runners, jet skis or what’s called personal watercraft. The fact is that most homeowner’s policies do not cover any type of watercraft, no matter how small.
• Many boaters think they can drive or sail their vessels in any waters and they’re covered. The fact is that some insurers only provide coverage where the boat is most often used. Coverage may be limited to within 100 miles of your home port.
• Many boaters think they pay more for insurance because of hurricanes. The reality is that boat insurance rates are based on the claims filed and paid out in each state. This means that boaters in Michigan will not pay more because of a hurricane in the Gulf of Mexico.
• Many boaters think the rate will be lower because they buy insurance from the same insurance company. Your may receive a premium discount if you have multiple insurance policies with the same carrier. However, that doesn’t impact the rate of the policy. It reduces your overall premium.