With the summer season in full swing, recreational boat owners need to assess whether they have adequate insurance coverage before hitting the high seas, according to the Insurance Information Institute, a non-profit communications organization supported by the insurance industry.
Standard boat policies typically cover damages resulting from a collision, fire or lightning. Theft and vandalism are covered also, as insured losses for boats can occur on land or in the water.
Moreover, many boat insurance policies provide coverage not only for the boat itself, but also for its machinery, fittings, auxiliary equipment such as outboard motors and boat trailers, permanently attached equipment such as anchors — up to an agreed value — and personal property. In addition, these policies often have provisions for: damage caused to someone else’s property; medical payments, for injuries to the boat owner and other passengers; bodily injury, for injuries caused to another person; and guest passenger liability, for any legal expenses incurred by someone using the boat with the owner’s permission.
"When determining how much you will pay for a boat insurance policy, insurers will also assess the size, type and value of the boat as well as the waterways in which it will be navigating," said Michael Barry, Insurance Information Institute vice president of media relations.
A boat insurance policy can provide physical damage coverage on an actual cash value or an agreed amount value basis. There are distinct differences between the two:
* Actual cash value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.
* Agreed amount value policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed amount value policies also replace old items for new ones in the event of a partial loss, without any deduction for depreciation.
According to the Insurance Information Institute, typical boat insurance policies include deductibles of $250 for property damage, $500 for theft and $1,000 for medical payments. Higher deductibles may be available. Most companies offering boat insurance have liability limits that start at $15,000 and can be increased to $300,000. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car. The level of coverage extending to special equipment kept on the boat, such as fishing gear and towing coverage, are other issues which should be weighed when acquiring a policy.
Boat owners should also inquire about premium discounts for the following:
* Diesel-powered craft, which are less hazardous than gasoline-powered boats as they are less likely to explode.
* Coast Guard-approved fire extinguishers.
* Ship-to-shore radios.
* Two years of claims-free experience.
* Multiple policies with the same insurer, such as an auto, home or umbrella policy.
* Completion of safety education courses, such as those offered by the Coast Guard Auxiliary or the U.S. Power Squadrons.