Homeowners insurance blog

Keep Your Boat and Passengers Safe

Summer is in full swing, meaning Popsicles, sprinklers, and lemonade. For those fortunate enough to live near water, it also can mean boat days on the lake, river, or ocean. Ensure smooth sailing by purchasing boat insurance. With adequate protection for your boat, family, and property, your summer will look sunny indeed.

The good news: The number of boating accidents, injuries, fatalities, and thefts declined in 2013 from the previous year. The bad news: The total value of property damaged in boating accidents has risen 2.6% to a yearly average of $39 million. The takeaway: Now’s the best time to buy protection for your boat.

Home insurance

If you own a canoe, sailboat, or motorboat whose maximum speed is less than 25 miles per hour, you could have some protection through your homeowners policy. Remember, however, that home insurance coverage sets aside 10% of the home’s insured value at most for boats. This protection also excludes liability coverage, so you could lose a significant amount of money if you’re found responsible in a boating accident.

Boat insurance

For larger, faster boats and personal watercraft, you’ll need a separate boat insurance policy. Coverage for physical loss extends to the hull, machinery, fittings, furnishings, and permanently attached equipment. This physical damage protection comes in two distinct types:

  • Actual Cash Value: This type of policy covers the replacement cost of the part or of the boat minus depreciation at the time of loss. In a total loss, for example, the insurer examines used boat pricing guides and other resources to determine a vessel’s approximate market value. In a partial loss, the policy pays the cost of repair after the deductible, minus a percentage for depreciation.
  • Agreed Amount Value: With this type of coverage, you and your insurer agree upon your boat’s value. Your policy will pay that amount in the event of a loss. In a partial loss, this protection can replace old items for new, with no regard to depreciation.

Exclusions to physical damage could include damage caused by normal wear and tear, insects, mold, animals, zebra mussels, and defective machinery.

Boat insurance also includes coverage for:

  • Injury: If you injure someone outside the boat in an accident, this type will help pay for any legal action or medical bills.
  • Property damage: Any damage to other boats, docks, or other property can be covered by this portion of your policy.
  • Guest passenger liability: If guests using your boat with your permission injure themselves and decide to take legal action, your policy can help pay for legal fees or judgments.
  • Medical payments: If you or your other passengers become injured in a boating accident, your medical payments protection can help pay for treatment.
  • Theft: Your policy also can help pay the cost of a stolen boat or personal watercraft.

Ways to save

Boat insurance discounts are the perfect ways to save money on your summer fun. You could earn these price breaks to make owning your boat more affordable:

  • Diesel-powered: Boats that run on diesel rather than gasoline are less likely to explode; that means they’ll cost less to insure.
  • Extinguishers: If you keep Coast Guard-approved fire extinguishers aboard your boat, you could earn a price break.
  • Good communicators: If you keep ship-to-shore radios aboard your boat, not only will you have peace of mind when it comes to a swift rescue but you also could pay less for your protection.
  • Safe boater: If you haven’t filed a claim for the past 2 years you’ve owned your boat, you could earn a price break for your safe boating.
  • Bundled up: Purchase multiple policies with the same insurer (car and boat or home and boat, for example) and you can save quickly.
  • Qualify your safety: Complete approved safety courses from organizations such as the Coast Guard or the American Red Cross, and you could earn a discount.

There are many ways you can practice boat safety while out on the water this summer. Purchasing boat insurance is only one of them. Familiarize yourself with the “rules of the road,” marine traffic laws, and distress signals to ensure the safety of yourself, your family, and others, and your summer can sail to new heights.