When thinking of ways to describe your boat, the word, “inexpensive” probably doesn’t come to mind. For investments such as homes, vehicles, or boats, maintaining a form of insurance is almost always a must. In the unfortunate event that your boat experiences some sort of damage or even theft, insurance can be the safety net that can potentially protect you from inevitably resigning the misfortune to a loss. With this guide, you will get a better idea of how boat insurance works, as well as how it can protect you and your investment.
When is Boat Insurance Necessary?
Determining the need for boat insurance is often as simple as taking a look at the vessel itself. As a rule of thumb, boats such as jet/speed boats, sailboats, jet skis, and yachts are ideal candidates for insurance. On the other hand, if your boat is classified as anything such as a canoe, rowboat, small engine vessel, or anything else that is small and cannot exceed 25 MPH in speed, you likely don’t need to worry about boat insurance.
Boat Insurance Types
When thinking about boat insurance, it can generally be broken into two types: “cash value” and “agreed value.” While a policy based on agreed value is based entirely on the value of the boat at the time of policy instatement, a policy based on real cash value factors in depreciation of the boat’s worth over time. To put it more simply, your boat’s value will be determined at the time of a claim rather than at the inception of the policy. As a boat grows in age, an insurer might push more for a cash value policy rather than agreed value.
In addition to basic boat insurance, special types of coverage can be purchased in addition to the barebones policy. These include:
- Consequential harm. Addresses damage as a result of natural circumstances such as corrosion, mold, or rotting.
- Special coverage. Coverage that is focused on particular parts such as the boat’s navigation system or prop.
- Salvage. Assists with removal and cleanup of your boat in the event of damage.
- Towing services. Coverage focused on moving your boat if it cannot start for whatever reason.
The price of your policy will heavily depend on a number of factors. These include, but aren’t limited to where you keep/use your boat, your boating certifications or training, past driving records for both land vehicles and boats, amount of liability, deductible, and towing coverage.
Boat insurance is necessary in most situations, and going without it can lead to unwanted disaster down the road. Before setting out on your next boating excursion, assess your need for insurance and coverage into the future.