BOAT INSURANCE

Personal boat insurance (also known as “marine insurance”) works like personal auto insurance, so many of its coverages may be familiar. For example, most boat owners get property insurance — or a hull policy — to cover the vessel, liability insurance to help pay for damage or injury to others, and uninsured boater coverage to help pay for damages to your boat or injuries you suffer if an uninsured boater crashes into you.

First, it’s important to define the types of boats that classify as pleasure boats. The most common are:

• Fishing boats,
• Sailboats,
• Pontoon boats,
• Small motor boats or center consoles, and
• Personal watercraft.

Boating insurance usually limits vessel length to 26 feet. Beyond that size, you may need to move into yacht insurance. If you own or are considering purchasing a houseboat, pleasure boat insurance would be insufficient protection.

Property insurance for boats

There are two essential coverages that protect you against financial loss due to physical damage to your boat: collision insurance and comprehensive insurance.

Collision insurance covers damage to your boat and its equipment and accessories (like a canopy). It can be written to include a trailer, specialty equipment (like fishing or water skiing), and personal effects that are on board during a crash. You can also add services, such as towing, emergency services (for example, fuel resupply), or salvage.

Comprehensive insurance covers similar damage that occurs from something other than a collision, such as fire, theft, vandalism, or storm damage. It can also cover your vessel while it’s in storage, but ask your insurance agent to see if there are restrictions. Also ask if risks such as mold, mildew, or pest damage are insured.

If you own a canoe, kayak or small sailboat, consider adding an endorsement to your homeowners policy, which typically may provide up to $5,000 in coverage. But for any motorized boat, or one that is higher in value, consider a standalone boat policy. If you want to add an endorsement, be sure to check on the liability limits because injuries are possible on any kind of boat.

Uninsured/underinsured (UIM) boater insurance is another coverage to review. It steps in to help with repair or replacement costs if a boater without sufficient liability insurance collides with you. It can prevent hefty out-of-pocket costs and legal headaches from seeking reimbursement from the at-fault party.

You may be able to choose from an agreed-value boat policy and actual cash value boat insurance, depending on the age of your boat. An actual cash value (ACV) boat policy lowers what the insurer will pay for a total loss by an amount that reflects the depreciation of the vessel’s value since purchase. ACV is often used for boats that are older than four years from date of manufacture. With agreed-value boaters insurance, you and the insurer settle on a value that provides enough coverage so you can replace a total loss with a new vessel of the same make and model.

Liability insurance for boats

If you are at fault in an accident or found liable for damage payments to a marina or dock, you will need boaters liability insurance. The size or horsepower of your boat may affect how much liability insurance you must carry, as each state has its own laws on boat liability insurance. Your insurance agent will be able to help you comply with these laws. Additionally, many marinas and storage facilities require owners to carry boat liability insurance and to include the marina on that policy as an additional insured. This is not difficult, but your insurance agent needs to know the requirement exists. The best procedure is to ask the facility about such a proviso and provide your agent with your marina or storage contract for review.

A boaters liability policy might include some coverage for fuel spills or other pollution liability, like oil, sewage or chemical discharge, but it’s best to check your policy for details on pollution and environmental coverage. There are likely substantial restrictions on what is covered, where coverage extends, and how much coverage is available. For example, gradual release (like ongoing leaks) could be excluded as could spills due to lack of maintenance. There are also nuances that your insurance agent can help explain, such as coverage for wreck removal, cleanup, environmental damage, and remediation costs.

Your liability coverage can be enhanced with medical payments insurance. This is an addition to your policy that helps pay for your medical treatment or that of your passengers due to injuries incurred in covered incident on your boat.

Depending on your use and your personal assets, you may also wish to secure excess liability or personal umbrella insurance. This kind of liability policy increases the money available to pay for costs deemed your responsibility after an insured event. An excess liability policy can sit atop your boaters liability insurance to provide millions of dollars of extra coverage in case you have an incident that exceeds the limits of your underlying boat insurance. An umbrella policy can do the same thing but for multiple policies. For example, you could have personal umbrella insurance that increases coverage amounts for your personal auto, homeowners and boaters liability policies altogether.

Many boat owners are unaware that as the boat’s operator, they have a “duty of care” toward the passengers and are responsible for their safety. If an accident or drowning occurs, due to rough water or that a passenger did not know how to swim — especially if alcohol is served — the boat owner can be held liable if their actions were not deemed to be “reasonable and prudent.”