While boat insurance is very easy to find, it is sometimes difficult to tell a good boat insurance policy from a bad one. Unlike auto insurance, which is for the most part standardized, it's rare to find two boat insurance policies exactly alike. For the most part, stand-alone boat insurance policies generally offer much better coverage for about the same price as opposed to boat insurance that's attached to a homeowners policy. This is especially true in Michigan, where there are not as many companies who offer stand-alone coverage.
So I’ve compiled this list of 10 key points to look for on the boat insurance policy. This is basically a combination of both things to look for and things just to stay away from. It’s not an all inclusive list, but it will give you a good understanding of knowing the difference between a good boat insurance policy and a bad policy. So let’s get started:
1. No crazy restrictions.
Some boat insurance policies have strict limitations about where a boat is moored or how it can be used. You need to make sure your boat insurance policy doesn't have any silly restrictions. For examples:
I’ve seen other silly restrictions on other policies, but those are the two most common. So be sure to take a good look for any exclusions or restrictions on your policy.
2. Agreed Value Coverage versus Actual Cash Value (ACV) coverage.
A boat insurance policy is going to be insured one way or the other. But the difference is huge! Agreed value coverage is far better than actual cash value coverage. Agreed value coverage represents the total amount that your boat is insured for in case of a total loss. Actual cash value coverage only insures your boat for its market value. Market value takes into account depreciation. That's why having Agreed Value coverage is very important.
3. Gap or total loss coverage.
This only applies to boats that are brand-new or almost new. But this loss can be huge if you don't have the right coverage. Gap or total loss coverage prevents you from becoming upside down, if you finance your boat. The extra cost is usually very minimal and is not only very well worth it, it’s a must have! With most companies that offer either GAP or Total Loss coverage, a boat with a model year less than two years is qualified.
4. Trailer coverage.
Almost any boat owner also has a trailer that you transport your boat with. Why not have insurance on the trailer as well? What you'll find is that insurance coverage on trailers that haul boats is usually cheap and well worth the price.
8. Uninsured motorist and medical payments coverage.
You’re probably familiar with these terms from dealing with auto insurance. They work exactly the same for boat insurance, only that some boat insurance policies don’t offer either coverage at all. Medical payments coverage will help pay for any injuries you or your passengers sustained from a boating accident regardless of who was at fault. Uninsured motorist coverage will protect you if another boater causes the accident and is not carrying liability coverage. Once again, a good boat insurance policy will offer both of these coverages, a bad policy will not.
9. Reasonable mileage limits.
Be sure to read the fine print on your boat insurance policy as far as how far you can go with your boat and still be covered. A good boat insurance policy won’t carry unreasonable restrictions that a bad boat insurance policy will. A good boat insurance policy will offer reasonable mileage limits, with the option to purchase farther limits if you need it.
10. Roadside assistance.
Many boat insurance policies that are attached to a homeowners policy don’t have roadside assistance coverage offered. For boat insurance companies that do offer coverage, the difference between what is covered and what is not varies greatly from one company to the next. So again, you need to read the policy and see exactly what your boat insurance company offers for roadside assistance coverage. In most cases, selecting this coverage is well worth the very small premium that usually comes with it.
You have to look closely at what is covered and what's not on your boat insurance policy. Boat insurance policies are much like snowflakes, and that no two are exactly alike. This list will help you understand what coverage you should have, and also make you aware of extra coverages you should be offered.
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Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..