Every boat owner should have a comprehensive insurance policy for their watercraft well before they get out onto the water for the first time. Boat insurance will provide you with financial protection in the event of many different types of accidents and injuries. Here is a look at exactly what these policies cover and how your premiums will be determined.
A baseline policy will cover many of the most common accidents that occur on the water and while transporting the boat. This includes minor accidents that damage the boat and any belongings inside the boat. If the an accident occurs and anyone in or near the boat is injured, then the policy should cover some or all of the medical costs.
Actual Cash Value or Agreed Value?
One of the biggest differences between boat coverage and all other forms of insurance is the fact that boat owners can choose between actual cash value and agreed value. Actual cash value policies will provide lower coverage as the watercraft becomes older and its value drops. Agreed value policies, on the other hand, remain consistent throughout the years. The owner can choose any value beforehand, but a larger policy will have higher premiums.
Determining Your Premiums
There are quite a few variables that will affect the policy’s premiums. This begins with the value of the boat and its total horsepower. The insurance broker will also take a look at the owner’s boating record, where the boat will be used, and what time of the year it will be used. A small fishing boat that is safely stored during the winter and only used for a few short trips will have much lower premiums than a luxury yacht.
Where Am I Covered?
Another unique feature of boat insurance is the fact that your boat might not be covered everywhere that you go. The policyholder must speak with their provider about where they will be taking the boat to ensure that those locations will be covered. Most policies have exclusions in the coverage such as boating more than 75 miles from the coast.