Boats are, after your home and maybe your cars, possibly your most valued assets. You can choose to own and operate a boat, yacht or personal watercraft without insurance (although some marinas and yacht clubs won't let you dock your craft unless you have coverage). However, that's not a very smart choice.
Although your homeowner’s insurance policy may offer some coverage for a watercraft, the limits are very low and the coverage is limited. Generally your policy will only pay up to $1000 to repair damage to your boat, but only while the boat is parked at your house. You will not be covered for anything that happens on the water.
So although you aren’t required by law to have an insurance policy for your boat, yacht, or personal watercraft, we highly recommend that you protect your investment and prepare for anything that can happen, whether you are on the water or not.
Lots of Options...How to Choose
Most insurance companies will insure three types of watercraft:
• Anything less than 16 feet long is usually called "personal watercraft" by most insurers. This includes Jet Skis and Waverunners.
• "Boats" are 16 feet to 25 feet, 11 inches.
• Anything at least 26 feet long is classified as a "yacht."
Personal watercrafts are usually the hardest to insure. They are more prone to accidents and tend to be more expensive to insure. Some insurance providers consider insuring them at all. If you are looking to insure this type of watercraft, discuss it with your Resource Insurance Group agent and we will do everything that we can to get you the insurance that you need.
* Note. If you use your watercraft for water-skiing, make sure you get coverage for this exposure as well. (Depending on the insurance company, it may not be automatically covered.) You can also get coverage for the trailer(s) you use to transport the watercraft.
Insurance for Powerboats, Sailboats
For most Powerboats and Sailboats can be insured for property damage, liability coverage, and medical expenses.
Property damage will generally cover for any damage done to the boat itself caused by fire, lightening, theft, vandalism, collisions, and windstorms. Your policy will also cover any damage done to the boat, outboard motor, the boat’s trailer and any personal property that is in the boat. Depending on the insurance company, you may choose between several options when it comes to the settlement in the event that the boat is found to be a total loss. You can choose to get,
• Replacement Cost- the company will buy you a similar brand new boat
• Agreed value - you and the insurance company agree in advance what the settlement value will be
• Actual Cash Value (ACV) - the insurance company will pay the fair market value of the boat at the time of the loss up to a specified rating base
The standard boat policy also provides liability coverage which is very similar in coverage and limits to the liability coverage on your auto insurance policy. You will be able to discuss the limits you would like with your Resource Insurance Group agent.
Medical expenses are usually covered by your boat insurance policy as well. This will cover and damage done by you, your family, or any other passengers on board. You may also choose to get uninsured or underinsured boaters insurance as well. This is similar to the uninsured/underinsured motorist coverage on your auto insurance policy.
Insurance for Yachts
If your boat is 26 feet or longer, you will need to purchase a yacht insurance policy, which is very similar to a standard boat insurance policy. The only noticeable difference is found in the policy terms (vocabulary).
In a yacht insurance policy, coverage for damage is called “physical damage” and the boat itself is referred to as the “hull.” Liability coverage is listed under “property and indemnity (P&I).” The limits on P&I coverage is much higher than on a regular boat policy since a yacht is generally worth more.
* Note. Like boat insurance, you should seek a yacht policy that offers coverage for medical payments (for you and your passengers) and uninsured boaters.
The cost of your boat or yacht policy is based on a variety of factors: horsepower; how fast it moves (it can cost as much as 50% more to insure a speedboat than it does a sailboat of similar size); where it is to be used; age of the craft and experience of the vessel's operator.
* Tip. Insurers often offer discounts of 5% to 20% to those boat/yacht owners who have taken an approved boating safety course. (In some states, such courses are required to operate a boat or yacht.) Discounts are available, from some insurers, for newer vessels and protective devices (depth finders, ship-to-shore radios, burglar alarms). You can also save money on the policy by electing a higher deductible.
Like boating itself, watercraft insurance is not cheap. As such, it truly pays to shop around. There are a lot of different policies and coverage options available. Some policies might be significantly cheaper than others, but they don't offer the coverages you need.
* Tip. This is a complex area of insurance with lots of options. Talk to our office. Let us help you to assess the many options out there and find the coverage that best suits your needs and best protects your assets.