Insure-your-Boat-and-or-Yacht

Boats need to be adequately insured, just like any other mode of transportation does. However, many boaters are not aware of boat and yacht insurance and the benefits it can provide for the policyholder. Since boats are subject to the same pitfalls as cars and other motor vehicles, owners should make sure they carry marine insurance to protect themselves in the event of an accident or other mishap.

 Why is boat insurance necessary?

The primary reason that boat insurance is necessary is that the boat is not covered by homeowner’s insurance. Although homeowner’s insurance may extend to small watercraft such as a paddle boat or sailboat, it will not extend to larger, more expensive varieties that require motors. So, having boating insurance in place will protect the owner in the event a coverable issue arises.

How does boat/yacht insurance differ from homeowners or auto insurance?

All insurance policies have some similarities; yet have their own unique qualities. Like home and auto insurance, boat insurance covers the policyholder if someone is injured by the boat. It also covers the policyholder if the boat causes damage to someone else’s property, including docks and other boats. It also provides coverage for physical damage to the boat if it runs aground or runs into something.

Another similarity to other types of policies is the ability to add extra coverage that protects against theft, vandalism, fire, and flood. There is even coverage that protects personal property that is on the boat such as fishing equipment.

Boat insurance differs from home and auto insurance in one important way. Boat insurance allows the policyholder to suspend the coverage when the boat is not being used. This option is never available for home and car insurance. Boat owners who take advantage of this feature of the policy need to be mindful of the time frame the boat is not covered. If the boat is used while the coverage is suspended, any incidents that occur during that time will not be covered by the policy.

Types of boaters insurance

Typically, insurance companies offer two different types of boat insurance: “agreed value” and “market value”. Fox Business describes the difference between these two policy types as lying in the depreciation value of the vessel. Agreed value policies require the insurance company and policyholder to agree on the market value of the boat at the onset of the policy. If something happens to the boat, the policyholder receives the full value of it. Conversely, market value policies insure the vessel for the current market value of it. So, if an older boat or yacht is damaged beyond repair, the policyholder will only receive the current market value for it.

Is the boat covered when it is not in the water?

The easy answer to this question is “yes”. However, when a watercraft is not in the water, it is not covered by boat insurance. If the policyholder is towing the boat with a car and hits something with the boat, the boat is covered by the policyholder’s auto insurance policy.  If a watercraft is damaged while parked on the owner’s property, it will be covered in part by the homeowner’s insurance policy. However, in a situation such as this one, the homeowner’s policy will only cover physical damage to the vessel. It will not provide coverage if the boat is stolen or vandalized while sitting on the property. If a homeowner wants extended protection while a water vessel is aground, Bankrate suggests purchasing an umbrella policy that extends coverage to terrestrial areas.

Navigational limits

Most watercraft insurance policies come with navigational limits attached to them. For smaller boats up to 26 feet, coverage is usually limited to inland waters or coastal waters in the United States and Canada. For larger vessels, more specific territories are defined by individual insurance companies.  However, of a boater or yachter desires to have a one-time trip outside the regularly insured area, insurance companies will usually work with them to provide temporary coverage that extends beyond the specified areas.

Getting started

It is important to note that boat and yacht insurance does not cover normal wear and tear or failure to maintain the vessel. According to Marine Agency, many insurance companies require a marine survey to look for hidden damage to the vessel.  However, if no exclusionary issues are found, issuing of marine insurance should not present a problem.

Purchasing boat and yacht insurance is part of being a responsible and safe watercraft owner. A policy of this type from Marine Agency can help assure that you are covered if your vessel is damaged. It can also help you pay for some medical bills that are associated with a boating accident.

If you are in need of boat or yacht insurance, contact Marine Agency today to see how we can customize a policy for you.

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