Understanding Watercraft Insurance Coverage

There are two components to a basic watercraft insurance policy:

1. Hull Value
This will pay for physical damages to the boat, with the limits of coverage based on the actual cash value of the boat, not its replacement value. In some cases, replacement-cost coverage may be available at a higher premium price.

2. Liability Coverage
This pays for any damages or injuries that you or someone driving your boat may cause to others while using your boat. The basic policy liability limits range from $100,000 to $500,000 depending upon your needs. Broader liability coverage is also available through an Umbrella Liability Policy; however, coverage related to your boat will have to be specifically scheduled.

Other features to consider

Desirable coverage options that may or may not be included in your basic watercraft policy include:

• Towing charges—transport of boat to shore if it becomes disabled
• Salvage tows—removal from a sand bar or other obstruction
• Accessories—fishing tackle, life preservers, dinghies, ski equipment, etc.
• Uninsured boaters—coverage for damages caused to you or your passenger by a boater who has no Liability Coverage

Note: You may have several options for covering your boat trailer. Check with an agent to determine whether it is covered under your watercraft policy or your homeowners policy, and whether or not it must be specifically scheduled.

Plan ahead for buying boat insurance
Unlike auto insurance, there is no grace period for binding insurance coverage on boats or personal watercraft. You must have your coverage in place before taking possession. Make sure you have consulted with your insurance agent in advance to acquire the level of coverage and pricing you desire, and to make sure - particularly in the case of jet skis and wave runners - that coverage is actually available.

Managing watercraft insurance costs
Some of the factors considered when determining the cost and coverage availability for boats are:

• Hull value
• Age of the boat
• Length of boat
• Size/type/number of motors
• Navigational limits
• Length of time in storage
• Automobile driving record of owner
• Past claims history
• Amount of insurance coverage
• Amount of deductible - the amount of claim costs you agree to pay out-of-pocket (The higher your deductible, the lower your cost for insurance)

Items that can help reduce the cost of your boat insurance are:

• Radar unit
• Ship-to-shore communication
• Depth finder
• Marine radio
• Vapor detector
• Vessel theft prevention alarm
• Automatic fire extinguishing system
• GPS or Loran system
• Completion of certified safety courses
• Higher deductibles

Other concerns:

If you are interested in jet skis and wave runners
Be aware that obtaining insurance for these and any other type of personal watercraft may be difficult. Due to the high rate of losses associated with jet skis and the like, many insurers have severely limited the coverage available for them, or will decline coverage for them under excess liability policies. Those with engines larger than 750cc can be especially difficult and costly to insure. Also, most insurers will not provide coverage for operators who do not have automobile drivers licenses.

If you want to rent a boat or personal watercraft
You should check your homeowners policy or consult with your insurance agent to determine if you have personal liability coverage in the event you would injure somebody or damage something while using the rented equipment. If coverage exists, there may be restrictions regarding the length of boat and size of motor that will be covered in a rental situation.