Tips for Protecting Boats and Yachts
Before you take your boat or yacht for that first pleasure cruise or fishing trip this season, make sure your boat insurance is ready to set sail, too.
Insuring a boat or yacht is different and more complex than insuring your auto or home. Boats require specialized coverages and other discrepancies like navigation limit, liability coverage, aftermarket product coverages and many others. To avoid being stuck with the bill for such a large investment, consider these tips from the experts at NBOA Marine Insurance:
Confirm Your Total Loss Settlement Coverage – The most significant coverage difference between various policies is whether the loss settlement basis is “Agreed Value” or “Actual Cash Value.” Agreed Value policies typically pay the limit shown on the policy when the boat is deemed to be a total loss. An Actual Cash Value policy may only pay the current market value of the boat, factoring in depreciation. While an Agreed Value policy generally costs more and provides broader coverage, Actual Cash Value polices may suit the needs of an owner looking for an economical alternative with less coverage. Note: Some lenders may require you to carry Agreed Value coverage. Be sure to check your policy carefully.
Partial Loss Settlement – “Replacement Cost” coverage normally pays for damage on a “new for old” basis (less your deductible), and age depreciation is not factored in for most losses. Actual Cash Value coverage for partial losses may reduce your claim payment based upon depreciation, and your policy deductible will apply as well. For more information on what is and is not covered, read the partial loss page.
Liability Coverage – Liability coverage is the least expensive, and often most important, aspect of your boat insurance policy. Liability features to ask about include coverage for: legal defense costs, wreck removal, oil pollution and contamination clean-up, and non-owned (i.e. borrowed) boats. If you employ a captain or crew, you should ensure that Jones Act coverage is included in your policy.
Medical Payments – Determine whether coverage includes you and your family, and that your intended activities are covered, such as waterskiing. Given equal amounts of Medical Payments insurance, coverage on a “per person” basis may be preferable to coverage on a “per accident” basis.
Uninsured Boater Coverage – This is an important feature to have in your policy since many boaters on the water don’t carry Liability coverage. In most states, a boat insurance policy is not mandatory, so it is important to protect yourself and your boat.
Evaluate Your Specific Needs – Are you a die-hard fisherman, or more of the cruising type? Is your boat built for speed or pleasure? Do you navigate in coastal waters, or stick to inland lakes and streams? Do you entertain on your boat, or do you prefer solo trips? Some insurance companies provide no-frills boat coverage that is simply added to an existing auto or homeowners’ policy. While this sounds good in theory, and the premium may be attractive, be wary and read the fine print. Most boat owners are best served seeking out a specialized policy just for boats, not an add-on to your car or house policy. Think about it – most boats and yachts are considered a serious investment and should not be an “add-on” to any policy. A knowledgeable, specialized boat insurance agency can review all your options. For instance, customized marine policies can cover things not likely covered by a generic policy, like fishing gear coverage and more costly services, such as emergency on-water towing and fuel-spill cleanup. Insuring a boat or yacht is different than insuring your car or home. A specialized boat insurance policy, for instance, can provide coverage for navigational electronics, engine upgrades, and other aftermarket equipment that might not be covered if the boat were just added to a generic marine policy.
Ask Your Fellow Boaters, and Seek Out a Specialized Policy – In the event of a claim, you will appreciate a company that provides specialized coverage and specialized claims handling. Ask other boaters what company they recommend or find an independent insurance agent who understands boat policies.
Marine Insurance Agencies Offer One-Stop Shopping – Give yourself a break and let a specialized marine insurance agency do all the work for you! Unlike “captive” agents or large insurance companies who can only offer one product, independent agents and brokers represent several. They can offer a variety of coverages, review and evaluate your policies, answer your questions and suggest new coverage options that meet your changing needs. Because they only specialize in marine products, you can bet your agent will know the details of your vessel, making the whole insurance process much smoother. They guide you to the policy that provides you with the best combination of specialized coverage, service and price.
Once you choose a policy, make sure you understand what you’re buying. Will your boat value decrease, or will it remain at the agreed value? Does your policy cover electronics? What happens if I hit an uninsured boater? Your agent should be able to explain, in layman’s terms, what the different options mean. If you are unclear about something, be sure to ask for an explanation.
“An independent insurance agent or broker like NBOA can make sure you have the specialized coverage you need to protect your boat,” said Jeff Berndt, NBOA Vice President. “Some insurance companies provide only bare-bones protection for your boat by simply adding it onto your existing auto or homeowner’s policy, but we can review and evaluate your needs to help match you with the company that will provide you with the combination of specialized coverage, service, and price that’s best for you.”
For more information about boat insurance, contact an experienced agent at NBOA Marine insurance at 1-800-248-3512 or complete a free boat insurance quote online.