7 Things you Probably Don't Know about Boat Insurance but should

Whether you've just bought a boat or you're unhappy with your current boat insurance policy, there are many aspects of boat insurance that you're probably unaware of. There are some excellent boat insurance policies out there that offer great coverage for reasonable prices. But there are also some very lousy boat insurance policies that are very limited. Before you shop around for boat insurance, there's a few things you need to know about what to look for in a boat insurance policy. Here's a list of the key points you need to be aware of.

• Exclusive boat insurance policies are 9 times out of 10 better than any boat insurance policy that is attached onto a homeowners policy. This one is by far the most important. Although there are some exceptions, most homeowners policies that allow boat insurance endorsements or attachments generally provide lousy coverage. To learn more about this, see my article: 10 Ways to tell a Good Boat Insurance Policy from a Bad one.
  
  

• Although boat insurance coverage is very similar to the coverages offered on an auto insurance policy, the way these coverages are priced are very different. Understand that the risk of you filing a claim on a boat is far less than it is of you filing a claim for auto insurance. Because of that, rates for the same types of coverage are going to be much lower for boat insurance than for auto insurance. One of the biggest mistakes you can make when buying boat insurance is using the same mentality as you would if you were shopping for auto insurance. Take the time to get a good look at the coverages offered and also look at the higher increments of coverage, as their most likely going to be far less costly than you might have anticipated.

• Trailer coverage. Any good boat insurance policy should also offer decent coverage for the trailer. But the fact is, many boat insurance companies offer lousy coverage on the trailer, or no coverage at all. Coverage on trailers are generally very inexpensive. So pay attention to the price versus the value you have in the trailer. Because in most cases it's going to be fairly cheap to insure it also.

• Contents coverage.  A good boat insurance policy will offer coverage on contents. Some policies will even offer free coverage up to a certain amount, and give you the option to purchase more if you wish. This includes things such as fishing equipment, navigation equipment, stereo equipment, or just generally tricking your boat out. If you have spent a good deal of money for things like this, it only makes sense to insure it.

• Liability coverage. Again going back to my point of comparing boat insurance to auto insurance liability coverage....  boat insurance is inexpensive in comparison. So always at least take a peek at the next highest levels of coverage. You may be amazed at how much little extra it costs. But another key point that a good boat insurance policy should have is coverage for fuel spillage and clean up. This has become a big problem for some boaters. If you're at fault in a boating accident and there's a fuel leakage, you will most likely be held responsible for those costs. Many boat insurance policies will not cover it. The same thing also goes for debris removal. You may be held responsible but yet your policy may not cover it. Both are a must-have for any liability part of a boat insurance policy. Make sure you have it!

•  For new boats, a good boat insurance policy will offer some sort of gap insurance or total loss protection coverage. Boats are just like automobiles in that they depreciate very quickly. In fact, the first year a boat usually depreciates around 10%. And if gap or total loss insurance offers coverage beyond one year, the boat will continue to depreciate about 6 to 8% a year for the next several years. Because of this, if you were to have a total loss, there's a very good chance you could become upside down on your loan if you financed a brand-new boat. Gap insurance and total loss coverage is one of the few areas where it's exactly like auto insurance in that it's a no-brainer to have if your motor vehicle is new enough to qualify for it.

• Towing coverage. Towing coverage is merely an afterthought after you've chosen the right boat insurance policy. But not considering towing coverage in some cases is a big mistake. Many boat insurance policies offer excellent coverage in case your boat breaks down. The difference in towing coverage between one boat insurance policy and the next can be as different as night and day. But some policies offer excellent towing coverage for very low premium. It's definitely worth taking a look at. The things to look for are:
  • whether or not towing coverage applies in the event that your boat breaks down or if it only applies when there's been an accident?
  • do you pay up front for the towing and get reimbursed later vs. being covered on the spot?
  • the maximum dollar amount the coverage offers.

Summary: The difference between one boat insurance policy to the next can be drastically different. Be sure to find out exactly what coverage you're getting. And always check to see how much higher levels of different coverages will cost (in many cases, it's next to nothing).


Have fun. Be safe, and enjoy this year's boat season!






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