Every boat operator and owner needs boat insurance as a way to protect the vessel and passengers against a sudden accident, loading dock mishap, liability or on the water scenario. All water-bound vehicles should be covered with boat insurance to provide protection of the vessel, its owner and passengers along with any kind of loss. Water vessel insurance policies usually cover a variety of motorized boats and other water vehicles such as yachts, jet skis and fishing boats.
Standardized Coverage Covering Injuries Related to Boat Accidents
The insurance policy typically covers motorized vessels, the operator and any passengers. This means that insurance protection for other water vehicles including paddle boats, kayaks and canoes are usually not covered. However, protection of non-motorized vehicles is often covered through a home insurance policy. Because of that, it is essential to purchase insurance for motorized boats to ensure full coverage against any injuries, death, or damage to property. Standardized insurance policies usually provide coverage that includes:
- Medical expenses associated with accidents
- Uninsured boater
- Bodily injury liability
- Property damage
- Comprehensive and collision coverage
Determining Costs For Obtaining Insurance Coverage For Your Vessel
Specific factors are considered when offering a policy to a boat owner that usually involves certain specifics about the vessel including:
- Its age, value and length
- The top speed the vessel can travel
- The vessel’s condition in meeting U.S. Coast Guard standards
- The boat type
- Whether the vessel serves as a primary residence
- Whether the boat is commercially constructed or homemade
- Whether the vessel is a non-motorized houseboat
- The number of owners
- Agreed Value vs. Actual Cash Value
Boat owners and operators can purchase agreed value insurance policies, or coverage based on actual cash value. The difference is typically how depreciation of the vessel is handled. “Agreed Value” policies provide coverage based on the value of the vessel at the time the policy was written. Typically, these types of policies have a higher upfront cost, because there is usually no depreciation on the value of the vessel over time, as a term of the policy.
Alternatively, an “Actual Cash Value” has a lower upfront cost because depreciation is factored into the policy. As a result, when damages occur, the insurance company will typically pay up to an amount equal to the vessel’s actual cash value when a partial loss or total loss is declared.
Types of Insurance Coverage Available to Illinois Boat Owners
Insurance on marine vessels vary greatly, based on the watercraft. Insurance policies for marine craft often include:
- Watercraft / PWC (personal watercraft)
- Yachts – Typically designated as vessels 27 feet and longer
- PWC & boat rentals that offer protective coverage for operators & passenger injuries and vessel damage
- Boat Club policies providing coverage of any club member when operating a vessel
- Professional watercraft including charters, fishing guides and professional anglers
“All Risk” Policies: Not As Extensive As You Would Think
How and where the boat is used will usually determine the best type of insurance the vessel requires. Many insurance companies offer “All Risk” coverage to provide the best insurance protection for the operator, passengers, boat and other vessels. However, there are still exclusions in all risk policies that often include damage by animals, denting, marring, wear and tear, in any defect in design, along with freezing and ice.
Typical Add-On Coverage
Many water vessel owners take out “add-on” coverage over and above their standard policy. Typical add-on options include:
- Consequential damage not involving an accident that could be cause by corrosion, mold and/or rot
- Specialized coverage to handle damage or loss to a specific item on the vessel including accessories or an expensive prop
- Salvage for removal of a boat suffering minor to substantial damage
- Cruising policy extension usually provides temporary insurance coverage when traveling out of the country
- Towing to handle any towing expenses to move the vessel to safer water or harbor
Other Factors Used By Insurance Carriers To Determine The Cost of Coverage
The cost of insurance for a boating vessel is often based on a variety of factors. Insurance carriers usually consider specific conditions of the boat and/or operator that include:
- Cruising area
- The automobile driving record and vessel piloting record of the owner
- Whether the owner/operator has been formally trained and/or certified in boating safety education
- Liability limits on the vessel
- The amount of deductible on the policy
It is essential to maintain appropriate protection insurance on every water vessel. Boat insurance companies offer a variety of policies to meet the needs of every operator/owner of motorized watercraft.
Role of Umbrella Policies With Boat Insurance
In addition to primary liability coverage which may cover a majority of mishaps and accidents involving personal injuries related to a boat accident, many boat owners are also covered under a more comprehensive ‘umbrella policy’. Depending how the policy was written and the carrier, an umbrella policy would be extended to cover incidents after the primary coverage has been exhausted. For example, in the context of a boater striking and seriously injuring a swimmer in the water, a umbrella policy could be utilized if the swimmers injuries were extensive or resulted in a fatality.
For any person seriously injured in an Illinois boating accident, some investigation and confirmation of umbrella coverage is an important component in resolving a claim with the boat owner’s insurance carrier.