Before renewing your boat insurance this season, examine the policy closely. In some cases, coverage may be lacking, or you may be paying more than you need. To learn more, check out these tips from Stafford Insurance, a company that has specialized in marine insurance for 133 years.
Go with a Pro
When it comes to insuring a boat and marine equipment, policy terms can vary widely depending on the underwriter, so it pays to shop around for the best deal and coverage. Using a company that specializes in boat insurance and whose agents are familiar with boats can streamline the process.
Replacement Vs. Depreciation
Read the policy’s valuation clause carefully. Some insurers subtract the depreciation of the boat based upon its age and condition. In the case of a total-loss claim, they may only issue a check for the value of the boat based on the current market value. Subsequently, you may end up paying too much on the policy as the boat depreciates over the years, and you may not receive replacement value if the boat is stolen or declared a total loss.
If you own a classic boat, a restored boat or a boat with sentimental value that would take a lot of money to replace, you may want to purchase an “agreed-value” policy. With this type of policy, you and the insurance company agree on the value of the boat and what it would cost to replace it in the case of a total loss.
Coverage of Engines, Equipment
Check the value assessed for partial losses on electronics, engines, generators and trailers. Unlike with a car, these items must be valued and covered separately. Also, be aware that the repair or replacement of curtains and canvas will rarely be at replacement cost, as most companies will deduct depreciation on these items.
Know the contractual terms of the policy. If your policy has a standard “layup warranty,” common in the Northeast, you have agreed that the boat will not be used between the dates of November 1 and April 1. If you use the boat during the layup period and have a mishap, the policy is automatically void—something to think about on those unseasonably warm days late or early in the season.
Similarly, if your boat is only insured for use in coastal waters, or a certain area of travel, you need to stay within the boundaries outlined by your policy or you risk violating the policy warranty. For example, if your coverage only extends to “coastal waters,” you will not be covered if an accident occurs beyond the 3-mile state-waters limit.
On the plus side, it is usually easy to arrange a rider or endorsement if you plan to boat beyond the coverage dates or travel beyond the geographic limits of the policy. You can usually get something in writing (an email will suffice) within 24 hours of making a request to your provider.
Liability is important, especially if you entertain guests on your boat. Get the maximum amount of liability you can afford, as there’s not that big a difference in premium between a $100,000 policy and a $500,000 policy.
Kid Stuff Let your underwriter know if your spouse or children will be driving the boat, even when you’re onboard—and especially if you’re not. If your kids damage the boat in your absence, you may not be covered.
Lowering Your Premium
Your driving record can affect your boat-insurance policy, so one way to lower your premium is to avoid any motor vehicle violations. Taking an approved safe-boating course or earning your captain’s license may also lower your premium, but only if you bring it to the attention of your agent and have all the necessary documentation.