What Does Boat Insurance Cover?

A boat insurance policy can help cover you and your water vessel against liability and damage in a boating accident. Boat insurance may also protect you if you injure someone or damage someone else’s personal property in an accident.

Some homeowners policies include riders for smaller boats, typically with a 25 to 100 hp horsepower limit. However, most homeowners insurance riders only cover vessels used in inland waterways, rivers, and lakes, not including coastal inlets or along the beach.

If you plan to take your boat outside the inlet, you will need a separate boat insurance policy--and a good one, at that.

Were you injured in a boating accident due to someone else’s negligence? Or did you cause an accident, and your insurance company refuses to pay up? Let the personal injury attorneys at Rosenfeld Injury Lawyers, LLC, handle the case for you.

Do you wonder if you have a probable case related to boat insurance coverage? Call our boat accident lawyers at (888) 424-5757 or fill out this online contact form. Speak with an experienced attorney today with just a few clicks.

Types of Boat Insurance Policies

The best type of policy for you depends on how much you want to pay upfront and whether you want to factor in depreciation. There are two basic types of boat insurance:

Actual Cash Value Coverage

Actual cash value coverage costs less upfront but factors in depreciation, meaning that the insurance company will only pay up to the current market value of the vessel when it is deemed a total or partial loss.

Agreed Value Coverage

An agreed value policy or loss settlement covers the vessel based on its value when you secured the policy. This type of policy costs more upfront but does not factor in depreciation for a total loss of the boat. However, partial losses may be depreciated.

Types of Vessels Covered

Marine insurance companies cover a wide array of watercraft, including:

• Boats
• Personal watercraft (PWC)
• Yachts - vessels 27’ and larger
• Sailboats
• Boat & PWC rentals
• Dinghies
• Boat clubs - covers all club members while operating a vessel in the ocean or fresh water
• Commercial boating (e.g., charters, fishing guides)

What Does Boat Insurance Cover?

The type of boat insurance coverage you need depends on the kind of boat or watercraft you have. But in general, a typical boat insurance policy provides coverage for:

Medical Payments Coverage

If you get into an accident, your medical payments coverage helps pay for medical bills for surgery, emergency transportation, medicine, therapy, and other necessary treatment.

Uninsured Boater Coverage

In an accident involving another boater with no coverage, uninsured boater coverage can help pay for medical costs resulting from the accident. Aside from you, the coverage extends to your family members and passengers.

Roadside Assistance and Reimbursement

If your boat or personal watercraft becomes non-operational, roadside assistance and reimbursement coverage will help pay for the transportation of your boat to the nearest repair facility.

Personal Property Coverage

This type of coverage potentially covers the replacement cost of personal effects on the boat, such as clothing, boat emergency equipment, and fishing equipment--unless expressly excluded by the insurer.

Physical Boat Damage

A standard boat or yacht policy covers physical damage to your boat’s hull and other components, such as equipment, furnishings, motor, and sails. However, many insurers exclude wear and tear, animal damage, denting, marring, manufacturer’s defects, design defects, and freezing.

Liability Coverage

If your boat damages someone else’s property or causes injury to another, boat liability coverage helps protect you from insurance claims and lawsuits. Fuel spills are typically covered in a standard policy, but it’s best to ask your insurance agent.

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 caused by corrosion, mold, and rot
• Specialized coverage to handle damage or loss to a specific item on the vessel, including accessories or an expensive prop
• Wreckage removal of a boat suffering minor to substantial damage
• Cruising policy extension usually provides temporary insurance coverage when traveling out of the country
• Coverage for a boat trailer

Boat and Yacht Insurance: What Is the Difference?

A yacht is defined as a boat 27 feet or larger. Generally, yacht coverage is more comprehensive than a standard boat policy because larger vessels travel greater distances and have unique exposures.

Harbor workers and Longshoreman's coverage and Jones Act (crew) coverage are also critical for larger boats. These coverages help pay for medical costs of workers injured due to negligence, much like workers’ compensation. Not acquiring these coverages can result in hundreds of thousands of dollars in expenses.

How Much Does Boat Insurance Cost?

The costs of insuring your boat vary from one insurance company to another. Boat insurance costs depend on many factors, including:

• The coverages, limits, and deductibles
• The type and size of the boat
• Where you will store and use the boat

Specific factors are also considered when offering a boat or yacht insurance policy to a boat owner, which 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 US 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 Policy vs. Actual Cash Value Policy

Some insurers offer discounts if you take a boat safety course or take out multiple policies under the same insurance company. You may also get a discount if you don’t use your boat all year round or if you only use it in freshwater.

Coverage Limits and Deductibles

Like any insurance policy, coverage limits apply to boat and yacht insurance policies. Coverage limits are the maximum amount your insurer will pay after a covered loss. These should be clearly outlined in your policy.

An insured value deductible refers to the amount you have to pay out of pocket before your insurance starts to pay. For example, if you file a claim for $5,000 worth of damage and the deductible is $1,000, you pay for the $1,000, and your insurer pays for the remaining $4,000.

Talk to your insurance agent about other features of your policy. The last thing you want is to get hit with an unexpected deductible that you cannot pay.

Breach of Warranty

Breach of warranty coverage protects the lienholder’s interest in your vessel. If you breach the warranties in the insurance policy, you and the lender do not get paid for that loss. Doing so may result in you paying for a boat that you cannot use.

Examples of breach of warranty include using your boat outside of your navigational limits and sailing during your lay-up period.

“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, defects in design, and freezing and ice.

It’s crucial to ask your insurance agent about what is not included in your insurance policy to avoid surprises later. Similarly, ensure that you understand all the insurance terms in your policy before signing on the dotted line.

Importance of Getting a Boat Insurance Policy

Boat owners are legally obligated to practice a standard of care when operating a watercraft. But even if you are always careful, accidents can happen to anyone at any time.

Even if you are not entirely at fault, you may be held liable if an incident leads to bodily injury or damage to other boats. Boat insurance coverages help protect you against liability and massive expenses if you get into an accident, whether or not it is your fault.

Without an insurance company to help cover the damages, you could pay for everything yourself. If the accident warrants a lawsuit, your expenses might be even more significant. A standard homeowners insurance policy may not be enough to cover everything.

All that said, keeping your boat insured is a great way to avoid expensive repercussions later on. More than that, employing proper boat safety practices can help you prevent accidents altogether.

Got a Problem With Your Boat Insurance Company?

Does your insurance company refuse to pay out for the coverages you pay for on your policy? Or is your insurance representative acting unscrupulously? Unfortunately, problems with marine insurance companies are not uncommon, especially if you’re filing a claim against another party’s insurance company.

If you want to take legal action against your insurer or the other party’s insurance company, seek assistance from Rosenfeld Injury Lawyers.

Call (888) 424-5757 or schedule a free consultation using the contact form on our website. In just a few clicks, you can start discussing your case today.

Resources:

• Forbes - Essentials of Boating Insurance
• Maritime Injury Guide - Jones’ Act
• Discover Boating - A Watercraft Insurance Guide