Buying a boat is a dream that many of us would like to achieve. Sitting on the water or racing through waves can be an amazing experience as an excursion or daily life. Since there are so many different types of boats available—you need to be careful about how you insure your watercraft.
There are a few different questions and factors you need to ask yourself before leaving shore. Even if the anticipation of motoring away is killing you—take these few ideas into consideration before diving in.
Do I Really Need Boat Insurance?
Insuring your new boat can sometimes be an afterthought but should be the first thing on your mind. Depending on what type of boat you have purchased will impact if you need additional coverage.
Here are a few examples of different types of boats:
- Personal Watercraft
- Ski Boats
Any type of boat is going to be a substantial investment and you are going to want to protect that investment. The same thing goes for automobiles. When you factor in depreciation and possible damage, it becomes easier to pull the trigger on purchasing insurance coverage.
Is My Boat Covered In My Existing Homeowner Policy?
When dealing with types of watercraft like kayaks or canoes, you will likely have enough coverage from your homeowner’s policy to enjoy fun on the water. They are usually considered part of your personal property and would be replaced if damaged or stolen, subject to your deductible. To be safe, you should check out your options and see if an additional policy is necessary.
On the other hand, if you’re driving any boat with a motor—we recommend getting a separate insurance policy. Your homeowner’s policy is only going to provide minimal coverage and only for boats with [around] 50 horsepower or less.
When Should I Purchase Boat Insurance?
With every investment, there are associated risks involved. The decision of when you want to cover your tracks with a backup plan is always up to the consumer. Do we recommend getting coverage as soon as possible?
Do your research or reach out to a company like G2 Insurance Services to determine the best policy for your boat. It is better to get a free estimate than pay big for an accident. For a quick quote, get in touch with one of our agents today at (262)784-0644!
How Should I Choose My Policy?
Choosing your policy will depend on a few different aspects, such as:
What is the Boat Type?
As we mentioned, if your boat has a motor that exceeds 50 horsepower than you will likely need better coverage. In a worst case scenario, you do not want to be left holding the bill in a catastrophic event. Not only is it going to cost you in fixing the damage but could also leave you with a higher overall premium. In our experience, it is best to get advice from a professional independent agent so they can evaluate your coverage needs.
What is the Value of the Boat?
A common misconception is over/undervaluing the property that needs insurance coverage. This is a serious issue because depending on the value if it is lost/stolen, damaged, or totaled will have a major impact your claim. The best thing to do is be completely honest with your agent and they can help you make informed coverage choices rather than trying to do it yourself via a website. Give a realistic number and you will be much happier with the outcome if you do need to file a claim.
What is the Intended Use of the Boat?
Did you buy your boat for personal fun, entertaining groups of friends/family, or using/renting it as a business? All of these scenarios are going to change how you should format your policy.
- Personal: If you want it for personal reasons you will be able to have your home insurance cover the liability of the watercraft.
- Entertainment: Having guests on your boat is half the fun… right?! If you have a little bit bigger boat and plan on having people onboard it might make sense to get a stand-alone boat policy. You can add extra coverages and help protect you and your guests more than just an endorsement to your home insurance.
- Business Use: If you have decided to use your boat for some side income (fishing guide or rental) then you are definitely going to need a completely different policy. This will constitute as a business and would require a specific policy for the way you take on liability for the customers.
- Umbrella: Chances are you already have an insurance but what if that isn’t enough? This is where the agent is going to come in handy. Rely on their expertise and have them look over your existing policy to let you know if you will need to upgrade to an umbrella policy or if the vehicle addition will suffice.
How Do You Want Your Boat to Be Insured?
Not every policy is going to be equal. Obviously, the choice is always yours on how much coverage you anticipate needing. Some policies are going to offer the Actual Cash Value that will be based on the yearly depreciation. Others will operate based on a Replacement Cost so you have better coverage but they may be more expensive.
Other things that will impact your coverage include:
- Fuel Spillage Coverage
- Critical Damage
For example… if you decide to get a boat that requires a trailer then you may be eligible for a package deal that will also cover the trailer. This package is also going to include the value of the motor. So when you are deciding on your coverage plan, you will need to incorporate the valuations of all of these components to determine your premium.
Additionally, many boats these days are equipped with fancy electronics. Sometimes they are considered “waterproof or water-resistant” but if the boat goes down… sadly, so will the electronics. These can add up to thousands of dollars in a very quick manner.
Aside from the boats installations, this coverage can be applied to other electronics that are used on the boat, like:
- Navigation Equipment
- Communication Equipment
- Fishing Poles
- Power Anchors
- Power Rods
In this day and age, technology is going to follow us everywhere. That is why it is crucial to have the proper coverage so you do not find yourself rebuying these important devices out-of-pocket.
What is Your Driving Record?
Another thing that is going to impact your policy premium is your regular driving record. This may not be a factor if you haven’t been in any prior accidents. Knock on wood…
But if you have [as many of us have] had an accident – then your driving record will have some type of impact on your rates.
Does it Matter Where I Use My Boat?
Another common question we encounter with boat insurance is how it will apply depending on where you dock/port the boat. If you use your boat on local inland lakes and rivers you will get a better rate than boats that are intended to be used on larger bodies of water like the Great Lakes or even an ocean.
Let Us Help!
Buying a boat is supposed to be fun and have you excited about using it safely. Take the time to reach out to one of our professionals and figure out the best coverage that will fit your needs. Visit our website to learn more about the other types of boat coverage or click here to fill out our form for a free and confidential initial consultation.