We love our boats but to provide peace of mind make sure you are covered for the unexpected events that can happen on the water. Deal with an experienced and reputable marine insurance broker that understands specific marine risks. Boat policies do not have mandated wordings such as automobile or many home policies and you need to know the fine print!
Boat insurance protects you financially by covering loss or damage to owned property and your legal liability for bodily injury or property damage to others. Coverage is not mandatory, but can cover the hull, equipment, trailer, personal effects, and other owned property, and insures your legal liability for injuries or loss of life, as well as for liability under various Maritime Acts and Statutes, and for property damage to other boats, docks, and the like.
You can insure small boats under your home policy, but you run the risk of inadequate coverage, higher premiums, and the loss of claims free discounts.
Let’s have a look at some of the more unique coverages under a stand-alone boat policy:
Wear and Tear Excluded
About 50% of all sinkings occur at the dock when a small part below the waterline fails (e.g., outdrive bellows cracks and leaks, scuppers clog, hose clamps fail, etc.). These parts often fail due to wear and tear, corrosion, and lack of maintenance. Wear and tear is a standard exclusion in all policies, and the “small part” is not covered. However, the good news is that the rest of the watercraft should be covered. Typical insured causes include fire, explosion, sinking, demasting, collision and stranding.
Fuel Spill liability
Unique to marine policies is coverage for legal liability for environmental liability, such as fuel spills. The best policies have fuel spill liability limits outside the overall liability limits and up to the maximum fines imposed under law.
Many of our policies cover on-water towing and assistance for breakdowns and soft groundings. Know how to use this coverage: call us for details, and check out our Services menu to locate emergency dispatch services. You will likely need to pay out of pocket for towing or assistance and be reimbursed by your insurer later.
Avoid disappointment in the event of a claim and ensure that your boat is valued and insured correctly. Newer boats may be insured to replacement cost but older ones may be insured based on depreciated values. What about equipment, repairs and improvements, and the effects of market fluctuations or depreciation? We’re available to answer questions.
You also want to ensure that if salvage and wreck removal fees are part of the overall insured value that limits are adequate to cover the cost of moving the boat to a safe location. Salvage fees may be incurred due to fire, sinking, windstorm, collapse of storage facilities, running up on a shoal, and many other reasons.
We can insure your boat and trailer, for loss or physical damage, while it is on land. Let us know the year, make, model, and value, of your boat and trailer, and the geographic area within which you will be towing your boat. Your automobile policy insures your legal liability for bodily injury or property damage should it involve the boat and trailer while on land
HOW TO SAVE MONEY ON INSURANCE
Add or Increase Lay-up Period
If you live and boat in a region of the US where the weather gets cold and stays cold for months on end, consider adding a lay-up period to your policy. The discount to your premium could be as high as 5% per month of lay-up. If you already have a lay-up warranty on your policy, then consider extending the lay-up period. If you do not leave the slip, most policies allow you to go and visit your boat during the lay-up period and spend a night or two on board.
Tip: this is an insurance warranty, meaning you do not have coverage for on- water use during the lay-up period. Make sure to remember the dates, or call our office, to ensure you do not use your boat during the lay-up period.
If you live in a hurricane prone zone, like the Gulf of Florida, buying boat insurance with hurricane coverage is very expensive and often more than twice the price of the same policy that excludes losses from hurricane. Also, policies with hurricane coverage come with a special hurricane deductible that is higher than the regular deductible. To save money, many boaters choose to delete windstorm coverage and go “X-wind”. You can pre- purchase hurricane haul out services from a local haul-out facility and the insurance savings should more than cover the expense. Hauling and securing the boat ahead of the hurricane is the best way to avoid damage.
Tip: Preparation is essential. Your insurer will place a moratorium on windstorm coverage well before a storm develops into a hurricane. You will not be able to purchase coverage at the “last minute” and haul out services may be too busy to accommodate
Reduce Hull Value
A large portion of your insurance premium is based on the hull
value. Depending on the type of insurance policy you have, your insurer may settle a claim for loss or damage to the hull based on Agreed Value, Replacement Cost, or Actual Cash Value (ACV). If you are insured for ACV, the insurer will consider replacement cost less depreciation, condition, obsolescence (e.g., electronics), and other factors, to approximate market value. To save premium by insuring to the correct hull value, consider regularly reviewing the value of your boat in the NADA guide at www.nadaguides.com, or at www.bucvalu.com.
Tip: ACV is the maximum your insurer will pay if you are insured under an ACV policy. Do not over insure, assuming the insurer is obligated to pay a higher value.
Increase the Hull Deductible
A large portion of your insurance premium is based on the hull value, yet the frequency of physical damage and loss is low in most regions of the US. It may be a very reasonable risk to take to increase the deductible from 1% to 2%, or even more for large vessels, and save perhaps 15% of the total annual premium.
Restrict Your Navigation
Family fun is more about day trips than long voyages at sea. Consider removing navigation to southerly regions not in your immediate plans. This can provide substantial savings on premium because the insurer is not exposed to the risk of hazardous navigation.
Tip: Navigation restrictions are a warranty under your insurance policy. You need to ensure that they are understood and respected if you are to maintain coverage under your policy. Give us a call if you plan on even a brief sojourn out of the policy navigation territory.
Get a Survey
Some insurers will offer a “no survey option” for older boats but will charge a higher premium to offset the risk. Consider obtaining a survey from a respected marine surveying firm of your choosing. A survey may help you save insurance premium by allowing us to “shop” the market. It may also save you an increase in rates if it prevents a claim or help settle a claim if one occurs. Surveys also attest to the seaworthiness of the watercraft for the safety of you and your family.
Tip: There are no Federal or State regulations regarding who is a qualified surveyor. Find those with experience with your type of boat and in your area and shop for the best price. We recommend that the surveyor belong to either NAMS, see www.namsglobal.org, or SAMS, see www.marinesurvey.org.
Know the Underwriting
Like all insurance coverage, the insurer will consider many risk factors when calculating rates. If you understand what the insurer is looking for you can have some influence on the price. Here’s some of the factors that most, but not all, insurers will consider:
- Age of all operators
- Motor vehicle convictions
- Safety courses
- Loss history
- Age, type and value of the vessel
- Maximum speed and horsepower of vessel
- Credit score
- Location of moorage and reputation of marina
Tip: Get experience with smaller craft before moving up in length and power, take safety course through the USCG, and avoid high horsepower craft, amongst other factors.
IMPORTANT TIP: UNLIKE MOST CONTRACTS, A CONTRACT OF INSURANCE REQUIRES UTMOST GOOD FAITH. THIS MEANS YOU ARE REQUIRED TO REVEAL ALL RELEVANT INFORMATION, AT THE TIME OF APPLICATION, OR LATER, WHETHER OR NOT REQUESTED BY THE INSURER. FAILURE TO DO SO CAN RESULT IN THE INSURER VOIDING YOUR POLICY.
We are here for you! Call us if you want clarification on any matters.