Boating insurance like car or motorcycle insurance is essential to not only protecting your investment, but to protecting you yourself. It is a necessary cost that all water craft owners should carry for one very simple reason; boats are expensive. While not all states and circumstances require boat insurance, if you have the money to buy one then you should have the money to insure that purchase. You don’t want to be docked during hurricane season, facing a whirling tropical storm on the verge of typhoon status without it. Here is a few key points to finding and feeling out insurance for you sea-craft.
Boat insurance is much trickier to field than your everyday auto insurance. Most boat insurer’s are privatized or are nationwide but boating is a side amenity. What I mean by this is that a policy can be taken out for your boat through your homeowner’s insurance provider. These companies are not boat based companies, their home insurers offering additional coverage on your grown up toys. Adding on to your home policy can be easy and clean-cut, but it is often limited in coverage and not ideal for serious boating enthusiasts. You can go with an independent insurance agent, ones geared towards boats, but these companies might be spotty and questionable in their endeavors. Just like with car insurance, you have to know your insurance agency is going to pay out in the event of an accident, otherwise there is no point to paying for insurance. With boats its a bit more severe because the cost of a boat is expensive (thus insurance is higher), the repairs are always expensive and accidents on the water might lead to sinking where cars crash and sit idol on the side of the road. If you know the company is reputable and trusted, take the plunge and sign up. Ultimately, however, the best bet for boating insurance comes from marine insurance specialists. These are insurance companies designed solely for boating coverage. Companies like Boat U.S. and NBOA have a long history in the maritime insurance racket. They pay out as long as you pay in.
Do your homework here. Find out with company does which and what for. Compile your evidence and notes. Know what a company has to offer, how they’ve handled claims in the past and what kind of financial background they have. You can use the same resource that you might with car insurers in the A.M. Best rating (www.ambest.com/ratings). A.M. Best is a company that keeps tabs on insurer’s financial stability and offers consumers a look into their gathered evidence. They are highly trusted and are the foremost authority for insurance intel. If you have boating friends or contacts at your marina, talk to them as well. Insight from trusted sources such as these will bring piece of mind and insider knowledge from the people most identical to your situation.
Once you’ve decided on a provider, you should consider the types of coverage you’re aiming after. There are two main choices for boat insurance; Agreed Value Policy and Actual Cash Value Policy. An Agreed Value policy allows you to replace your boat at full value with a new one. This means if you’re boat sinks and you’re policy is paid and processed, it will be replaced with a brand new version of the same boat. Actual Cash Value works differently because it pays for the current value of your boat, rather than the current value of a new counterpart. If you’ve had your boat for ten years, the Actual Cash Value will be less than when you originally bought it. Conversely, Agreed Value on that same boat might be hard if the model has been discontinued. Then there is no new version of your current boat to replace it with. In that event, you might receive the full value of that boat at it’s original cost. All of this, however, is slightly skewed from insurer to insurer and policy to policy. The immediate difference between the two is that Agreed Value is more expensive and Actual Cash Value.
For those with small fishing boats or older, worn out models, Actual Cash Value is the best option. It’s cheaper and Agreed Value isn’t quite worth the price as you’re boat probably cannot be replaced by the same model anymore. If you are sporting a new speed boat or cruiser, then Agreed Value is your best option. Set the policy up to cover a certain cost (say $50,000) and it will pay out at that cost. It also covers the parts and pieces of your boat that might be broken and will be replaced by a new equivalent. One of the things to watch out for, however, is a limit salvage coverage. This is the amount that might be paid to a salvager to resurrect your boat from the heap of tattered hulls and engine parts that it might become. If the salvage coverage is less than your Agreed Value or it subtracts your deductible from the total amount of money available to repair your boat, it can lead to you not getting the full reimbursement of your Agreed Value. By making it the same as the Agreed Value policy, you insure that your boat will either be replaced as new or repair to the point of being almost new.
The last thing to consider is your geography. Where does your boat make port? If you live along the coast or around a gulf feeding out into the ocean, you may need to consider additional coverage geared towards hurricane. Often times, policies carry hurricane deductibles that raise your deductible for salvage and repairs as a deterrent against the wicked waves of hurricanes and tropical storms. If you live on one of the Great Lakes, then the odds are you’ll never run into a perfect storm, so you can live without such coverage. Most all this can be broken-down and explained by your marine insurance specialist once you’ve selected one.
It might be aesthetically beautiful to be out on the great blue beyond and there might not be an equivalent to the serenity and splendor of sailing, but not even beauty can protect you against the worst case scenario of owning a boat. That is what boat insurance is for; to shield your investment while you bask in the beauty of the boating experience. While maybe not Confucius quality, there is a saying that sums up why you should have boat insurance. Use it or lose it.
0 Comments.