Need for Boat Insurance Beyond Liability

Through no fault of their own, boat owners can experience loss.

Just about any peril can unexpectedly damage or destroy a boat. Lightning, fire, collision, burglary, theft or vandalism can trigger unforeseen financial losses. While liability boat insurance coverage helps protect the boat owner against a claim or lawsuit that results from property damage or bodily injury to others caused by the boat, other types of boat insurance help provide appropriate insurance coverage against non-liability issues.

Collision

Collision coverage can help pay for the cost to repair or replace the boat should it be stolen or damaged. When collision coverage is in place, the insurance company pays for damage to the boat in the event it collides with another boat or non-living object, such as a pier or pole. It does not matter who is at fault. The owner shares in the expense by paying a deductible.

Comprehensive

With comprehensive coverage, the insurance company pays for damage to the boat that is caused by some event other than a collision. This can include fire, theft or vandalism. As an example, if the boat hits an animal, or if the boat is flooded or stolen, comprehensive coverage can apply.

Property Damage

Boat insurance policies can also include coverage for damage to virtually all types of watercraft. These may include vessels as large as houseboats or as small as jet skis, as well as stern-drive boats, boats with either an outboard or inboard motor, jet-drive boats, sailboats and the transport equipment used to move boats. The insurance coverage can also encompass permanently attached boat equipment. If personal effects coverage is added to the policy, it can provide insurance coverage for non-attached items, including clothing and recreational gear.

Uninsured Boat Owner Coverage

This coverage can help offset the cost of injuries the boat owner may sustain as a result of an accident caused by an uninsured boat owner or in a hit and run boating accident.

Three Valuation Options

Boat value is at the heart of these types of non-liability insurance, and there are three common ways to insure a boat's value. One is known as Actual Cash Value, and it is usually the least costly insurance. With this option, a base policy pays the market value of the boat at the time of loss. The market value can be less than what the boat owner paid for the boat and less than the amount of any loan against the boat. The boat owner may be responsible for the difference. A second way to insure is based on Agreed Value. The insurer and the insured determine a boat value at the start of the policy. That value is used to determine loss despite current market value. In the event of a partial loss, some components of the boat may be depreciated, so the owner needs to understand the policy thoroughly. The third option is Total Loss Replacement Cost. This covers replacement of the boat with the newest model if the boat is a total loss within its first five model-years.

References

• Progressive: Comprehensive and Collision
• AmPmInsure: Boat Insurance
• Commonwealth of Massachusetts Division of Insurance: Guide to Boat Insurance (PDF)