Boat insurance policies can vary widely from one company to the next, unlike home or auto insurance. Which type is best? Here are some tips for you.
One way to find a good insurer is to ask other boat owners who have had a claim in the past. Insurance companies may be good at taking monthly premiums, but how a company lives ups to expectations when something goes wrong is a better indicator. Your marinas, yacht broker, or repair yard may also be willing to provide a referral.
Most insurance companies do not deal with the public directly so you need to find an insurance broker. The broker that handles your home and auto insurance might be able to assist you with smaller boats, rowboats or canoes. For boats over 26ft or with engines above 50 hp you should look for a broker that specializes in recreational marine insurance.
Homeowner's or separate policy for the boat?
Consider buying a separate insurance policy for the boat, rather than adding it to your homeowner's policy as the latter often limits certain marine-related risks such as salvage work, wreck removal, pollution or environmental damage. Whatever amount the boat is insured for, it should have a separate but equal amount of funds available for any salvage work. This means that you're compensated for the loss of your boat and not having to pay additional, out-of-pocket costs to have a wreck removed from a waterway.
Agreed Value vs. Actual Cash Value:
These are the two main choices that boater's face and depreciation is what sets them apart. An "agreed value" policy covers the boat at whatever value you and your insurer agree upon. While it typically costs more up front, there is no depreciation if there is a total loss of the boat (some partial losses may be depreciated). "Actual cash value" policies, on the other hand, cost less up front but factor in depreciation and only pay up to the actual cash value at the time the boat is declared a total or partial loss or property was lost.
Your needs first:
A good insurance broker will ensure the policy you purchase is suited to your needs so there will be no surprises. For example, bass boaters may need fishing gear and tournament coverage as well as "cruising extensions" if they trailer their boat far from home. After you find a broker take the time to explain how you intend to use your boat, where it will be operated and when.
What is the best coverage for my boat?
It is best to have what is known as an "All Risk" policy, which will provide coverage for all types of losses except those specifically excluded in the policy. Typical exclusions may include wear and tear, gradual deterioration, marring, denting, scratching, animal damage, manufacturer's defects, defects in design, and ice/freezing.
What are the differences between boat and yacht insurance?
Generally "boats" are considered to be 26' and smaller, and "yachts" are 27' and larger. Generally speaking yacht coverage is broader and more specialized because larger boats travel further and have more unique exposures.
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