A boat is a mixture of many things depending on the type of craft that you own. In many cases it is like a home and car all rolled into one. A place for you to go and enjoy yourself with friends and family. But just like a home or a car, things can happen to and with a boat that require the right amount of protection. So it is best to check out what you need to be fully protected when it comes to boat insurance.
Boat vs. Yacht. Most companies provide limited coverage for property damage for small boats such as canoes and small sail boats or small power boats with less than 25 mile per hour horse power under a homeowners or renters insurance policy. Coverage is usually about $1,000 or 10 percent of the home's property value and generally includes the boat, motor and trailer combined. Liability coverage is typically not included-but it can be added as an endorsement to a homeowners policy.
Larger and faster boats, yachts, and personal watercraft such as jet skis and wave runners require a separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage. For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment for an agreed value. These policies also provide broader liability protection than a homeowners policy and cover bodily injury, property damage, and theft.
Consider an All-Risk Policy. When you are insuring a larger boat such as a yacht, it is generally wise to choose an ALL-RISK policy. This type of coverage protects against physical damage or loss of the boat in several circumstances, including flood, fire, theft, vandalism and transportation. You will have to choose between two types of insurance coverage: "Agreed Value" and "Actual Value." Agreed value coverage is generally more expensive since it will pay you a pre-determined amount (such as the boat's original purchase price) in the case of a total loss. In contrast, in the case of a total loss, actual value coverage will pay the boat's current, depreciated book value.
Pay Attention to Deductibles. Pay attention to your policy's deductible (the amount you pay before your insurance payments kick in). Large deductibles are not necessarily a bad thing since typically the higher the deductible is, the lower your insurance premiums will be. Typical boat insurance deductibles are set at 1% to 3% of the boat's value.
How to Lower Boat Insurance Costs. The cost of your boat insurance will be determined by the age and type of your boat, your boating experience, any past insurance claims and your automobile driving record. In order to reduce your boat insurance premiums, you should take a boating course that offers certification upon completion. Completing a certification course should provide you with a discount on boat insurance rates. Also, you may reduce insurance rates by installing security equipment and theft protection devices on your boat. You should consult your insurance agent before installing any device to make sure that discounts are available.